A bank's profitability affects its safety and soundness. Earnings can be retained by the bank, increasing its capital cushion, or be used to address problematic loans, likely making the bank better prepared to withstand financial shocks. Obviously, banks that are losing money have less ability to do those things.
The Garrett State Bank did above-average on Bankrate's earnings test, achieving a score of 24 out of a possible 30.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. The Garrett State Bank's most recent annualized quarterly return on equity was 16.24 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $3.7 million on total equity of $23.2 million. The bank experienced an annualized return on average assets, or ROA, of 1.63 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.