A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, likely making the bank better prepared to withstand economic trouble. However, banks that are losing money are less able to do those things.
Chelsea State Bank did above-average on Bankrate's earnings test, achieving a score of 24 out of a possible 30.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Chelsea State Bank's most recent annualized quarterly return on equity was 14.37 percent, above the national average of 8.10 percent.
The bank earned net income of $4.6 million on total equity of $32.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.62 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.