How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, likely making the bank better prepared to withstand financial trouble. Losses, on the other hand, diminish a bank's ability to do those things.
Capitol National Bank fell short of the national average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one widely used measure of a bank's earnings. Capitol National Bank's most recent annualized quarterly return on equity was -3.06 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $-439,000 on total equity of $13.8 million. The bank reported an annualized return on average assets, or ROA, of -0.37 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.