How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them to address problematic loans, likely making the bank better able to withstand economic trouble. Conversely, losses diminish a bank's ability to do those things.
On Bankrate's test of earnings, Alamerica Bank scored 4 out of a possible 30, lower than the national average of 16.52.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one widely used measure of a bank's earnings. Alamerica Bank's most recent annualized quarterly return on equity was 2.01 percent, below the national average of 9.28 percent.
The bank earned net income of $59,000 on total equity of $5.9 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.32 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.