A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or use them to address problematic loans, potentially making the bank better able to withstand economic shocks. Conversely, losses take away from a bank's ability to do those things.
Clarkson Bank scored 20 out of a possible 30 on Bankrate's earnings test, above the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. Clarkson Bank's most recent annualized quarterly return on equity was 10.67 percent, above the national average of 8.10 percent.
The bank earned net income of $764,000 on total equity of $7.2 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.33 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.