A bank's earnings performance has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand economic trouble. Losses, on the other hand, take away from a bank's ability to do those things.
Mechanics Bank received below-average marks on Bankrate's earnings test, achieving a score of 8 out of a possible 30.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. Mechanics Bank's most recent annualized quarterly return on equity was 4.02 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $31.8 million on total equity of $804.7 million. The bank experienced an annualized return on average assets, or ROA, of 0.57 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.