A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to address problematic loans, likely making the bank better able to withstand economic shocks. Banks that are losing money, however, are less able to do those things.
On Bankrate's test of earnings, Emigrant Bank scored 8 out of a possible 30, failing to reach 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. Emigrant Bank's most recent annualized quarterly return on equity was 3.99 percent, below the national average of 9.28 percent.
The bank reported net income of $22.2 million on total equity of $1.17 billion for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.70 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.