How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or use them to address problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, lessen a bank's ability to do those things.
Cathay Bank scored 18 out of a possible 30 on Bankrate's earnings test, beating out the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. Cathay Bank's most recent annualized quarterly return on equity was 9.24 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $179.2 million on total equity of $2.13 billion. The bank had an annualized return on average assets, or ROA, of 1.22 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.