A bank's profitability affects its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to address problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money have less ability to do those things.
Anchor Commercial Bank scored 12 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 16.52.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one widely used measure of a bank's earnings. Anchor Commercial Bank's most recent annualized quarterly return on equity was 5.71 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank reported net income of $342,000 on total equity of $12.2 million. The bank had an annualized return on average assets, or ROA, of 0.57 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.