A bank's earnings performance has an effect on its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, likely making the bank better prepared to withstand economic trouble. However, banks that are losing money are less able to do those things.
The Bank of Old Monroe scored 20 out of a possible 30 on Bankrate's earnings test, exceeding the national average of 15.12.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. The Bank of Old Monroe's most recent annualized quarterly return on equity was 12.04 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $6.0 million on total equity of $52.0 million. The bank experienced an annualized return on average assets, or ROA, of 1.78 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.