A bank's profitability affects its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money are less able to do those things.
GrandSouth Bank scored 4 out of a possible 30 on Bankrate's earnings test, less than 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 GrandSouth Bank was 1.71 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $989,000 on total equity of $58.4 million. The bank experienced an annualized return on average assets, or ROA, of 0.17 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.