A bank's profitability has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, diminish a bank's ability to do those things.
On Bankrate's test of earnings, AloStar Bank of Commerce scored 16 out of a possible 30, falling short of the national average of 16.52.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for AloStar Bank of Commerce was 7.29 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank recorded net income of $7.0 million on total equity of $195.7 million. The bank had an annualized return on average assets, or ROA, of 1.48 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.