A bank's profitability affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, likely making the bank better able to withstand financial trouble. Conversely, losses lessen a bank's ability to do those things.
On Bankrate's earnings test, Friendly Hills Bank scored 8 out of a possible 30, coming in below the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Friendly Hills Bank was 3.68 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $596,000 on total equity of $16.3 million. The bank had an annualized return on average assets, or ROA, of 0.39 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.