How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the bank better able to withstand economic trouble. Conversely, losses take away from a bank's ability to do those things.
The Necedah Bank scored 10 out of a possible 30 on Bankrate's test of earnings, below the national average of 15.12.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for The Necedah Bank was 4.22 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $169,000 on total equity of $3.6 million. The bank reported an annualized return on average assets, or ROA, of 0.49 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.