How profitable a bank is affects its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or use them to address problematic loans, potentially making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.
On Bankrate's test of earnings, Sibley State Bank scored 12 out of a possible 30, lower 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. Sibley State Bank's most recent annualized quarterly return on equity was 5.30 percent, below the national average of 8.10 percent.
The bank recorded net income of $444,000 on total equity of $8.4 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.56 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.