How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, expanding its capital buffer, or be used to address problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, take away from a bank's ability to do those things.
Salem Five Cents Savings Bank scored 14 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 16.06.
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 Salem Five Cents Savings Bank was 6.97 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $31.7 million on total equity of $470.6 million. The bank had an annualized return on average assets, or ROA, of 0.71 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.