How profitable a bank is has an effect on its long-term survivability. Earnings can be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money are less able to do those things.
On Bankrate's earnings test, North Alabama Bank scored 6 out of a possible 30, lower than the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. North Alabama Bank's most recent annualized quarterly return on equity was 2.41 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $290,000 on total equity of $12.0 million. The bank experienced an annualized return on average assets, or ROA, of 0.31 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.