A bank's profitability has an effect on its long-term survivability. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.
The National Bank of Malvern received below-average marks on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. The most recent annualized quarterly return on equity for The National Bank of Malvern was 3.53 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $807,000 on total equity of $22.6 million. The bank had an annualized return on average assets, or ROA, of 0.53 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.