How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, boosting its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in tough times. Conversely, losses take away from a bank's ability to do those things.
Uwharrie Bank fell behind the national average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Uwharrie Bank's most recent annualized quarterly return on equity was 4.50 percent, below the national average of 8.10 percent.
The bank earned net income of $2.4 million on total equity of $52.6 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.41 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.