How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, lessen a bank's ability to do those things.
Spencer County Bank scored 10 out of a possible 30 on Bankrate's test of earnings, less than the national average of 15.12.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Spencer County Bank's most recent annualized quarterly return on equity was 4.89 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $590,000 on total equity of $12.3 million. The bank had an annualized return on average assets, or ROA, of 0.55 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.