A bank's profitability has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.
On Bankrate's earnings test, Capstone Bank scored 16 out of a possible 30, less than the national average of 16.52.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for Capstone Bank was 7.24 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank reported net income of $2.1 million on total equity of $58.3 million. The bank experienced an annualized return on average assets, or ROA, of 0.81 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.