Overview
Bank earnings are considered to be of good quality when the earnings are high and/or consistent. For banks with low earnings, or earnings that are especially volatile, are a risk in the sense that the earnings could take a downturn, possibly even becoming negative, making the bank unable to meet its obligations.
Call Report Ratios
When analyzing a banks earnings position from its financial statements and call reports, analysts often look at the following ratios.
- ROA - return on assets
- ROE - return on equity