How profitable a bank is affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, potentially making the bank more resilient in tough times. Obviously, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, Community Bank of Memphis scored 16 out of a possible 30, beating out the national average of 15.12.
One key way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The most recent annualized quarterly return on equity for Community Bank of Memphis was 7.67 percent, below the national average of 8.10 percent.
The bank recorded net income of $422,000 on total equity of $5.7 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.87 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.