A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses reduce a bank's ability to do those things.
On Bankrate's earnings test, Capital Bank scored 20 out of a possible 30, exceeding the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. Capital Bank's most recent annualized quarterly return on equity was 10.64 percent, above the national average of 8.10 percent.
The bank recorded net income of $3.7 million on total equity of $35.5 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.95 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.