How profitable a bank is affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, reduce a bank's ability to do those things.
1st Constitution Bank scored 14 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 16.52.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for 1st Constitution Bank was 6.60 percent, below the national average of 9.28 percent.
The bank earned net income of $4.0 million on total equity of $124.3 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 0.78 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.