A bank's profitability has an effect on its long-term survivability. Earnings may be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank better able to withstand economic trouble. Conversely, losses reduce a bank's ability to do those things.
Broadway Federal Bank, f.s.b. beat the national average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. Broadway Federal Bank, f.s.b.'s most recent annualized quarterly return on equity was 8.44 percent, below the national average of 9.28 percent.
The bank reported net income of $2.1 million on total equity of $50.0 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.95 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.