A bank's profitability has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.
First Neighborhood Bank received below-average marks on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. First Neighborhood Bank's most recent annualized quarterly return on equity was 2.96 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $473,000 on total equity of $15.9 million. The bank reported an annualized return on average assets, or ROA, of 0.33 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.