A bank's ability to earn money affects its long-term survivability. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank better able to withstand financial shocks. Banks that are losing money, however, have less ability to do those things.
On Bankrate's test of earnings, Legacy Bank scored 14 out of a possible 30, falling short of 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 (profit, basically) by the total amount of equity. Legacy Bank's most recent annualized quarterly return on equity was 6.90 percent, below the national average of 8.10 percent.
The bank recorded net income of $2.4 million on total equity of $35.1 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.68 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.