A bank's profitability affects its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, potentially making the bank better able to withstand economic shocks. Banks that are losing money, however, are less able to do those things.
The Bank of Baker scored 30 out of a possible 30 on Bankrate's earnings test, beating out the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for The Bank of Baker was 21.74 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $3.1 million on total equity of $14.7 million. The bank had an annualized return on average assets, or ROA, of 2.13 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.