A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. Conversely, losses take away from a bank's ability to do those things.
The Carlsbad National Bank scored 28 out of a possible 30 on Bankrate's test of earnings, exceeding 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. The Carlsbad National Bank's most recent annualized quarterly return on equity was 19.06 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $5.6 million on total equity of $29.5 million. The bank had an annualized return on average assets, or ROA, of 1.56 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.