How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or use them to address problematic loans, potentially making the bank more resilient in times of trouble. Banks that are losing money, however, are less able to do those things.
On Bankrate's earnings test, ChoiceOne Bank scored 18 out of a possible 30, better than the national average of 15.12.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. ChoiceOne Bank's most recent annualized quarterly return on equity was 8.79 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $6.2 million on total equity of $71.6 million. The bank reported an annualized return on average assets, or ROA, of 0.99 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.