A bank's ability to earn money affects its safety and soundness. Earnings can be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. Banks that are losing money, however, are less able to do those things.
Southern Community Bank scored 18 out of a possible 30 on Bankrate's earnings test, exceeding the national average of 16.52.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. Southern Community Bank's most recent annualized quarterly return on equity was 9.75 percent, above the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank recorded net income of $1.2 million on total equity of $26.1 million. The bank reported an annualized return on average assets, or ROA, of 1.00 percent, right at the level deemed satisfactory in accordance with industry standards, but below the average for U.S. banks of 1.14 percent.