How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand economic trouble. Obviously, banks that are losing money have less ability to do those things.
Coastal Bank & Trust scored 26 out of a possible 30 on Bankrate's earnings test, beating out 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. Coastal Bank & Trust's most recent annualized quarterly return on equity was 19.99 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $1.7 million on total equity of $9.6 million. The bank experienced an annualized return on average assets, or ROA, of 1.78 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.