A bank's ability to earn money affects its safety and soundness. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial shocks. Losses, on the other hand, reduce a bank's ability to do those things.
On Bankrate's test of earnings, Southport Bank scored 18 out of a possible 30, better 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 total equity. Southport Bank's most recent annualized quarterly return on equity was 9.95 percent, above the national average of 8.10 percent.
The bank recorded net income of $3.1 million on total equity of $31.1 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.08 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.