How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, lessen a bank's ability to do those things.
On Bankrate's earnings test, Terrabank, National Association scored 12 out of a possible 30, lower than the national average of 16.52.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for Terrabank, National Association was 5.63 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank earned net income of $930,000 on total equity of $33.9 million. The bank reported an annualized return on average assets, or ROA, of 0.50 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.