A bank's profitability affects its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the bank better prepared to withstand financial trouble. Losses, on the other hand, reduce a bank's ability to do those things.
Golden State Bank scored 16 out of a possible 30 on Bankrate's earnings test, above the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. Golden State Bank's most recent annualized quarterly return on equity was 11.14 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $1.9 million on total equity of $25.1 million. The bank experienced an annualized return on average assets, or ROA, of 1.04 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.