A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or use them to deal with problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, take away from a bank's ability to do those things.
State Bank of Belle Plaine beat the national average on Bankrate's test of earnings, achieving a score of 16 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one key measure of a bank's earnings. State Bank of Belle Plaine's most recent annualized quarterly return on equity was 7.14 percent, below the national average of 8.10 percent.
The bank reported net income of $828,000 on total equity of $11.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.72 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.