How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital buffer, or be used to address problematic loans, likely making the bank better able to withstand financial trouble. Obviously, banks that are losing money are less able to do those things.
On Bankrate's test of earnings, Sandhills Bank scored 12 out of a possible 30, falling short of the national average of 16.52.
One important way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. The most recent annualized quarterly return on equity for Sandhills Bank was 5.22 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank reported net income of $450,000 on total equity of $17.4 million. The bank reported an annualized return on average assets, or ROA, of 0.51 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.