How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital buffer, or be used to address problematic loans, potentially making the bank better prepared to withstand economic trouble. Banks that are losing money, however, are less able to do those things.
First Alliance Bank scored 8 out of a possible 30 on Bankrate's earnings test, lower than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one key measure of a bank's earnings. First Alliance Bank's most recent annualized quarterly return on equity was 3.83 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $519,000 on total equity of $13.8 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.