A bank's profitability affects its safety and soundness. Earnings can be retained by the bank, increasing its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses reduce a bank's ability to do those things.
Town Bank did below-average on Bankrate's test of earnings, achieving a score of 14 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important measure of a bank's earnings. Town Bank's most recent annualized quarterly return on equity was 6.63 percent, below the national average of 8.10 percent.
The bank reported net income of $16.5 million on total equity of $250.6 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.86 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.