A bank's profitability affects its long-term survivability. Earnings can be retained by the bank, boosting its capital cushion, or be used to address problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, diminish a bank's ability to do those things.
State Bank of Scotia fell behind the national average on Bankrate's earnings test, achieving a score of 12 out of a possible 30.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. State Bank of Scotia's most recent annualized quarterly return on equity was 5.90 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $564,000 on total equity of $9.8 million. The bank had an annualized return on average assets, or ROA, of 1.42 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.