A bank's profitability has an effect on its long-term survivability. Earnings can be retained by the bank, expanding its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money are less able to do those things.
CerescoBank received below-average marks on Bankrate's earnings test, achieving a score of 12 out of a possible 30.
One important way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. The most recent annualized quarterly return on equity for CerescoBank was 5.11 percent, below the national average of 8.10 percent.
The bank earned net income of $386,000 on total equity of $7.6 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.83 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.