A bank's ability to earn money has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.
North County Savings Bank underperformed the average on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important measure of a bank's earnings. The most recent annualized quarterly return on equity for North County Savings Bank was 5.88 percent, below the national average of 8.10 percent.
The bank earned net income of $250,000 on total equity of $4.4 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.49 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.