How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.
The Security State Bank scored 12 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 15.12.
One key way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. The Security State Bank's most recent annualized quarterly return on equity was 5.77 percent, below the national average of 8.10 percent.
The bank recorded net income of $357,000 on total equity of $6.3 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.83 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.