How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank better prepared to withstand economic trouble. However, banks that are losing money have less ability to do those things.
On Bankrate's earnings test, Community Bank of Santa Maria scored 14 out of a possible 30, falling short of 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, essentially) by total equity. The most recent annualized quarterly return on equity for Community Bank of Santa Maria was 6.47 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $1.5 million on total equity of $23.2 million. The bank experienced an annualized return on average assets, or ROA, of 0.56 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.