A bank's earnings performance has an effect on its safety and soundness. Earnings can be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank better able to withstand financial shocks. Losses, on the other hand, lessen a bank's ability to do those things.
On Bankrate's test of earnings, Chelsea Groton Bank scored 8 out of a possible 30, coming in below the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. Chelsea Groton Bank's most recent annualized quarterly return on equity was 3.86 percent, below the national average of 8.10 percent.
The bank reported net income of $6.1 million on total equity of $161.5 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.57 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.