How profitable a bank is affects its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the bank better able to withstand economic trouble. However, banks that are losing money are less able to do those things.
On Bankrate's earnings test, The Bank of Magnolia Company scored 8 out of a possible 30, falling short of the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for The Bank of Magnolia Company was 3.31 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $310,000 on total equity of $9.4 million. The bank reported an annualized return on average assets, or ROA, of 0.38 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.