A bank's profitability affects its long-term survivability. Earnings can be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank better prepared to withstand economic shocks. Banks that are losing money, however, are less able to do those things.
The Bank of Forest did below-average on Bankrate's earnings test, achieving a score of 12 out of a possible 30.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The Bank of Forest's most recent annualized quarterly return on equity was 5.96 percent, below the national average of 8.10 percent.
The bank reported net income of $1.3 million on total equity of $24.2 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.77 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.