How profitable a bank is affects its long-term survivability. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand economic shocks. However, banks that are losing money are less able to do those things.
On Bankrate's earnings test, East Boston Savings Bank scored 18 out of a possible 30, beating out the national average of 16.06.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for East Boston Savings Bank was 8.68 percent, above the national average of 8.10 percent.
The bank reported net income of $43.0 million on total equity of $532.6 million for the twelve months ended December 31, 2017. The bank experienced 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.