A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, reduce a bank's ability to do those things.
On Bankrate's earnings test, State Bank Financial scored 14 out of a possible 30, below the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one key measure of a bank's earnings. State Bank Financial's most recent annualized quarterly return on equity was 6.53 percent, below the national average of 8.10 percent.
The bank earned net income of $2.4 million on total equity of $35.9 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.71 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.