A bank's profitability has an effect on its long-term survivability. Earnings can be retained by the bank, boosting its capital buffer, or be used to address problematic loans, likely making the bank better prepared to withstand economic shocks. Losses, on the other hand, lessen a bank's ability to do those things.
On Bankrate's test of earnings, Mechanics Bank scored 16 out of a possible 30, beating the national average of 15.12.
One widely used measure of 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 7.10 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $3.0 million on total equity of $42.5 million. The bank reported an annualized return on average assets, or ROA, of 0.59 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.