A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to address problematic loans, potentially making the bank better able to withstand financial trouble. Obviously, banks that are losing money have less ability to do those things.
Southwest Georgia Bank scored 20 out of a possible 30 on Bankrate's test of earnings, beating out 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. Southwest Georgia Bank's most recent annualized quarterly return on equity was 10.38 percent, above the national average of 8.10 percent.
The bank recorded net income of $3.9 million on total equity of $38.6 million for the twelve months ended December 31, 2017. The bank reported 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.