A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand economic shocks. Losses, on the other hand, diminish a bank's ability to do those things.
On Bankrate's earnings test, SouthPoint Bank scored 24 out of a possible 30, exceeding the national average of 16.52.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. SouthPoint Bank's most recent annualized quarterly return on equity was 15.25 percent, above the national average of 9.28 percent.
The bank earned net income of $2.0 million on total equity of $27.2 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 1.37 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.