How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money are less able to do those things.
The Exchange State Bank of St. Paul, Kansas fell behind the national average on Bankrate's earnings test, achieving a score of 14 out of a possible 30.
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 Exchange State Bank of St. Paul, Kansas's most recent annualized quarterly return on equity was 6.46 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $432,000 on total equity of $6.9 million. The bank had an annualized return on average assets, or ROA, of 0.63 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.