A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the bank better able to withstand financial shocks. However, banks that are losing money have less ability to do those things.
Pacific Coast Bankers' Bank scored 14 out of a possible 30 on Bankrate's test of earnings, failing to reach the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important measure of a bank's earnings. Pacific Coast Bankers' Bank's most recent annualized quarterly return on equity was 6.54 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $4.5 million on total equity of $68.0 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.