A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, likely making the bank better prepared to withstand economic shocks. Conversely, losses reduce a bank's ability to do those things.
State Bank of New Richland scored 30 out of a possible 30 on Bankrate's earnings test, above the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one key measure of a bank's earnings. State Bank of New Richland's most recent annualized quarterly return on equity was 25.25 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $2.5 million on total equity of $9.5 million. The bank experienced an annualized return on average assets, or ROA, of 2.45 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.