A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand financial shocks. Losses, on the other hand, lessen a bank's ability to do those things.
Sturgis Bank & Trust Company outperformed the average on Bankrate's test of earnings, achieving a score of 18 out of a possible 30.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for Sturgis Bank & Trust Company was 9.03 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $3.4 million on total equity of $39.0 million. The bank had an annualized return on average assets, or ROA, of 0.84 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.