A bank's profitability affects 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 prepared to withstand economic shocks. Losses, on the other hand, take away from a bank's ability to do those things.
Adirondack Bank fell behind the national average on Bankrate's test of earnings, achieving a score of 14 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. Adirondack Bank's most recent annualized quarterly return on equity was 7.01 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $4.2 million on total equity of $60.6 million. The bank reported an annualized return on average assets, or ROA, of 0.52 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.