A bank's earnings performance has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses diminish a bank's ability to do those things.
Community Banks of Shelby County underperformed the average on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. Community Banks of Shelby County's most recent annualized quarterly return on equity was 3.46 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $188,000 on total equity of $5.5 million. The bank experienced an annualized return on average assets, or ROA, of 0.40 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.