A bank's ability to earn money has an effect on its long-term survivability. A bank can retain its earnings, expanding its capital buffer, or use them to address problematic loans, likely making the bank better able to withstand financial trouble. Banks that are losing money, however, have less ability to do those things.
On Bankrate's test of earnings, Neighborhood National Bank scored 4 out of a possible 30, failing to reach the national average of 15.12.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. Neighborhood National Bank's most recent annualized quarterly return on equity was 1.72 percent, below the national average of 8.10 percent.
The bank earned net income of $148,000 on total equity of $10.0 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.25 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.