A bank's profitability has an effect on 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 better prepared to withstand financial shocks. However, banks that are losing money are less able to do those things.
The Olpe State Bank scored 12 out of a possible 30 on Bankrate's test of earnings, below the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one widely used measure of a bank's earnings. The Olpe State Bank's most recent annualized quarterly return on equity was 5.46 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $316,000 on total equity of $5.7 million. The bank reported an annualized return on average assets, or ROA, of 0.82 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.