How profitable a bank is affects its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the bank better prepared to withstand financial trouble. However, banks that are losing money are less able to do those things.
On Bankrate's test of earnings, Solera National Bank scored 8 out of a possible 30, falling short of the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. Solera National Bank's most recent annualized quarterly return on equity was 3.28 percent, below the national average of 8.10 percent.
The bank reported net income of $740,000 on total equity of $23.3 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.45 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.