How profitable a bank is has an effect on its long-term survivability. Earnings may be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand economic trouble. However, banks that are losing money have less ability to do those things.
Cornerstone Bank scored 4 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 15.12.
One important way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. Cornerstone Bank's most recent annualized quarterly return on equity was 1.62 percent, below the national average of 8.10 percent.
The bank recorded net income of $206,000 on total equity of $12.6 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.19 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.