A bank's ability to earn money has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital cushion, or be used to address problematic loans, likely making the bank more resilient in times of trouble. Conversely, losses reduce a bank's ability to do those things.
High Desert Bank did below-average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.
One important way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. High Desert Bank's most recent annualized quarterly return on equity was -106.35 percent, below the national average of 8.10 percent.
The bank recorded net income of $-817,000 on total equity of $374,000 for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of -3.41 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.