A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money are less able to do those things.
Bank of Alma scored 8 out of a possible 30 on Bankrate's earnings test, below the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. Bank of Alma's most recent annualized quarterly return on equity was 3.91 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $3.9 million on total equity of $100.3 million. The bank had an annualized return on average assets, or ROA, of 1.71 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.