A bank's profitability affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to deal with problematic loans, likely making the bank better able to withstand financial trouble. However, banks that are losing money are less able to do those things.
The Guilford Savings Bank scored 10 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. The Guilford Savings Bank's most recent annualized quarterly return on equity was 4.99 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $4.5 million on total equity of $91.8 million. The bank reported an annualized return on average assets, or ROA, of 0.64 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.