A bank's ability to earn money has an effect on its long-term survivability. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, likely making the bank better able to withstand economic trouble. However, banks that are losing money are less able to do those things.
Small Town Bank scored 18 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. The most recent annualized quarterly return on equity for Small Town Bank was 9.59 percent, above the national average of 8.10 percent.
The bank recorded net income of $3.6 million on total equity of $38.5 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.68 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.