A bank's profitability has an effect on its long-term survivability. Earnings can be retained by the bank, increasing its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. Banks that are losing money, however, have less ability to do those things.
On Bankrate's earnings test, Sherwood Community Bank scored 18 out of a possible 30, better than the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Sherwood Community Bank was 9.28 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $407,000 on total equity of $4.4 million. The bank had an annualized return on average assets, or ROA, of 0.82 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.