How profitable a bank is affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, likely making the bank more resilient in tough times. Conversely, losses diminish a bank's ability to do those things.
On Bankrate's earnings test, SOUTHERN BANK OF TENNESSEE scored 18 out of a possible 30, exceeding the national average of 15.12.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. SOUTHERN BANK OF TENNESSEE's most recent annualized quarterly return on equity was 10.28 percent, above the national average of 8.10 percent.
The bank earned net income of $2.9 million on total equity of $29.2 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.14 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.