How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money are less able to do those things.
Auburn Banking Company scored 24 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 (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. Auburn Banking Company's most recent annualized quarterly return on equity was 15.85 percent, above the national average of 9.28 percent.
The bank reported net income of $506,000 on total equity of $6.4 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 1.30 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.