A bank's profitability affects 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 more resilient in times of trouble. Losses, on the other hand, diminish a bank's ability to do those things.
Chemung Canal Trust Company received below-average marks on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. The most recent annualized quarterly return on equity for Chemung Canal Trust Company was 4.79 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $6.9 million on total equity of $142.9 million. The bank had an annualized return on average assets, or ROA, of 0.40 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.