A bank's ability to earn money has an effect on its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank better able to withstand economic shocks. Conversely, losses lessen a bank's ability to do those things.
Watertown Savings Bank scored 12 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. Watertown Savings Bank's most recent annualized quarterly return on equity was 5.81 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $6.8 million on total equity of $117.5 million. The bank reported an annualized return on average assets, or ROA, of 0.58 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.