A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.
Alliance Bank scored 20 out of a possible 30 on Bankrate's earnings test, beating out the national average of 16.52.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. Alliance Bank's most recent annualized quarterly return on equity was 11.96 percent, above the national average of 9.28 percent.
The bank reported net income of $3.9 million on total equity of $68.8 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 1.08 percent, above the 1 percent deemed satisfactory in accordance with industry standards, but below the average for U.S. banks of 1.14 percent.