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 cushion, or be used to deal with problematic loans, likely making the bank better prepared to withstand economic shocks. Conversely, losses reduce a bank's ability to do those things.
Southern Community Bank outperformed the average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.
One key way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The most recent annualized quarterly return on equity for Southern Community Bank was 9.93 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $2.6 million on total equity of $26.8 million. The bank experienced an annualized return on average assets, or ROA, of 1.04 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.