A bank's profitability affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to address problematic loans, likely making the bank better prepared to withstand economic shocks. Losses, on the other hand, reduce a bank's ability to do those things.
Alliance Bank scored 8 out of a possible 30 on Bankrate's earnings test, less than the national average of 15.12.
One important measure of a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The most recent annualized quarterly return on equity for Alliance Bank was 3.93 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $1.2 million on total equity of $30.8 million. The bank had an annualized return on average assets, or ROA, of 0.60 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.