How profitable a bank is affects its long-term survivability. A bank can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money are less able to do those things.
On Bankrate's earnings test, Union State Bank of West Salem scored 8 out of a possible 30, lower than the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. Union State Bank of West Salem's most recent annualized quarterly return on equity was 3.80 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $354,000 on total equity of $9.4 million. The bank had an annualized return on average assets, or ROA, of 0.43 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.