A bank's ability to earn money has an effect on its long-term survivability. Earnings may be retained by the bank, expanding its capital cushion, or be used to address problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money are less able to do those things.
Sturdy Savings Bank received below-average marks on Bankrate's earnings test, achieving a score of 6 out of a possible 30.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Sturdy Savings Bank's most recent annualized quarterly return on equity was 2.89 percent, below the national average of 8.10 percent.
The bank earned net income of $2.3 million on total equity of $78.0 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.27 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.