A bank's ability to earn money affects its long-term survivability. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the bank better able to withstand financial trouble. Obviously, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, The Covington Savings and Loan Association scored 6 out of a possible 30, less than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. The Covington Savings and Loan Association's most recent annualized quarterly return on equity was 2.94 percent, below the national average of 8.10 percent.
The bank reported net income of $301,000 on total equity of $10.4 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.44 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.