How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to address problematic loans, likely making the bank better prepared to withstand economic shocks. Banks that are losing money, however, have less ability to do those things.
The Colorado Bank and Trust Company of La Junta fell behind the national average on Bankrate's earnings test, achieving a score of 14 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one key measure of a bank's earnings. The Colorado Bank and Trust Company of La Junta's most recent annualized quarterly return on equity was 6.53 percent, below the national average of 8.10 percent.
The bank recorded net income of $658,000 on total equity of $10.2 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.50 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.