A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. Banks that are losing money, however, are less able to do those things.
Paper City Savings Association received below-average marks on Bankrate's earnings test, achieving a score of 12 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important measure of a bank's earnings. Paper City Savings Association's most recent annualized quarterly return on equity was 6.10 percent, below the national average of 8.10 percent.
The bank earned net income of $1.2 million on total equity of $20.9 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.77 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.