How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, potentially making the bank better able to withstand economic shocks. However, banks that are losing money are less able to do those things.
1st Constitution Bank received below-average marks on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for 1st Constitution Bank was 5.86 percent, below the national average of 8.10 percent.
The bank earned net income of $7.3 million on total equity of $126.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.69 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.