How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. Conversely, losses diminish a bank's ability to do those things.
On Bankrate's test of earnings, Watertown Savings Bank scored 12 out of a possible 30, lower than the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. Watertown Savings Bank's most recent annualized quarterly return on equity was 5.40 percent, below the national average of 8.10 percent.
The bank recorded net income of $5.0 million on total equity of $94.3 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.77 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.