How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to deal with problematic loans, potentially making the bank more resilient in tough times. Obviously, banks that are losing money have less ability to do those things.
Bank of New Castle underperformed the average on Bankrate's test of earnings, achieving a score of 2 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. Bank of New Castle's most recent annualized quarterly return on equity was 0.50 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $85,000 on total equity of $17.0 million. The bank experienced an annualized return on average assets, or ROA, of 0.49 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.