A bank's ability to earn money affects its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Obviously, banks that are losing money are less able to do those things.
The Commercial Bank of Grayson scored 12 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 15.12.
One important measure of a bank's earnings is return on equity, or net income (essentially profit) divided by total equity. The Commercial Bank of Grayson's most recent annualized quarterly return on equity was 4.94 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $1.3 million on total equity of $25.1 million. The bank experienced an annualized return on average assets, or ROA, of 0.71 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.