How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. Conversely, losses lessen a bank's ability to do those things.
On Bankrate's test of earnings, State Bank of Alcester scored 18 out of a possible 30, above the national average of 16.52.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. State Bank of Alcester's most recent annualized quarterly return on equity was 8.73 percent, below the national average of 9.28 percent.
The bank earned net income of $471,000 on total equity of $11.0 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.77 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.