A bank's earnings performance has an effect on its long-term survivability. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial shocks. However, banks that are losing money are less able to do those things.
FlatIrons Bank outperformed the average on Bankrate's earnings test, achieving a score of 20 out of a possible 30.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. FlatIrons Bank's most recent annualized quarterly return on equity was 12.82 percent, above the national average of 8.10 percent.
The bank earned net income of $1.8 million on total equity of $15.3 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.20 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.