How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial shocks. Losses, on the other hand, take away from a bank's ability to do those things.
Xenith Bank scored 0 out of a possible 30 on Bankrate's test of earnings, failing to reach the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. Xenith Bank's most recent annualized quarterly return on equity was -7.29 percent, below the national average of 8.10 percent.
The bank reported net income of $-34.2 million on total equity of $434.1 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of -1.06 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.