A bank's profitability affects its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand economic trouble. Losses, on the other hand, take away from a bank's ability to do those things.
Sandhills Bank scored 0 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 15.12.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for Sandhills Bank was -0.40 percent, below the national average of 8.10 percent.
The bank recorded net income of $-69,000 on total equity of $16.5 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of -0.04 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.