How profitable a bank is has an effect on its long-term survivability. Earnings can be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank better prepared to withstand economic shocks. Banks that are losing money, however, have less ability to do those things.
On Bankrate's earnings test, Savings Bank of Mendocino County scored 12 out of a possible 30, lower than the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. The most recent annualized quarterly return on equity for Savings Bank of Mendocino County was 5.30 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $8.9 million on total equity of $167.0 million. The bank experienced an annualized return on average assets, or ROA, of 0.82 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.