A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, take away from a bank's ability to do those things.
On Bankrate's test of earnings, Legacy Bank scored 20 out of a possible 30, exceeding the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. Legacy Bank's most recent annualized quarterly return on equity was 12.07 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $5.7 million on total equity of $49.0 million. The bank reported an annualized return on average assets, or ROA, of 1.85 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.