How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or use them to deal with problematic loans, potentially making the bank better prepared to withstand financial shocks. However, banks that are losing money have less ability to do those things.
Union Bank received above-average marks on Bankrate's earnings test, achieving a score of 24 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. Union Bank's most recent annualized quarterly return on equity was 15.22 percent, above the national average of 8.10 percent.
The bank recorded net income of $8.8 million on total equity of $58.4 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.26 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.