A bank's profitability has an effect on its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, diminish a bank's ability to do those things.
Freehold Savings Bank scored 6 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 15.12.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. Freehold Savings Bank's most recent annualized quarterly return on equity was 2.40 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $881,000 on total equity of $36.9 million. The bank reported an annualized return on average assets, or ROA, of 0.29 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.