A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to deal with problematic loans, likely making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.
Woodland Bank received below-average marks on Bankrate's earnings test, achieving a score of 10 out of a possible 30.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for Woodland Bank was 4.85 percent, below the national average of 8.10 percent.
The bank reported net income of $520,000 on total equity of $10.9 million for the twelve months ended December 31, 2017. The bank had 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.