A bank's ability to earn money affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money have less ability to do those things.
Silvergate Bank scored 0 out of a possible 30 on Bankrate's earnings test, less than the national average of 15.12.
One key 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 Silvergate Bank was 9.86 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $8.7 million on total equity of $92.3 million. The bank experienced an annualized return on average assets, or ROA, of 0.70 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.