How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to deal with problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, Southern Bank scored 18 out of a possible 30, better than the national average of 16.52.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The most recent annualized quarterly return on equity for Southern Bank was 11.08 percent, above the national average of 9.28 percent.
The bank reported net income of $8.3 million on total equity of $172.2 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 1.06 percent, above the 1 percent deemed satisfactory in accordance with industry standards, but below the average for U.S. banks of 1.14 percent.