How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. Conversely, losses reduce a bank's ability to do those things.
Folsom Lake Bank scored 8 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 16.52.
One widely used measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. Folsom Lake Bank's most recent annualized quarterly return on equity was 3.82 percent, below the national average of 9.28 percent.
The bank recorded net income of $330,000 on total equity of $17.6 million for the twelve months ended June 30, 2017. 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 1.14 percent.