A bank's profitability affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial shocks. Conversely, losses reduce a bank's ability to do those things.
Cornerstone Community Bank scored 18 out of a possible 30 on Bankrate's earnings test, above the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. Cornerstone Community Bank's most recent annualized quarterly return on equity was 8.90 percent, above the national average of 8.10 percent.
The bank recorded net income of $1.9 million on total equity of $22.3 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.90 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.