A bank's ability to earn money affects its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, take away from a bank's ability to do those things.
State Bank of Wapello scored 14 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 15.12.
One key way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. The most recent annualized quarterly return on equity for State Bank of Wapello was 6.65 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $319,000 on total equity of $4.9 million. The bank experienced an annualized return on average assets, or ROA, of 0.80 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.