A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, likely making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.
On Bankrate's test of earnings, The Bank of Beaver City scored 20 out of a possible 30, above the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The Bank of Beaver City's most recent annualized quarterly return on equity was 11.06 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $1.5 million on total equity of $14.0 million. The bank reported an annualized return on average assets, or ROA, of 1.12 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.