A bank's profitability affects its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or use them to address problematic loans, likely making the bank better prepared to withstand economic shocks. Losses, on the other hand, lessen a bank's ability to do those things.
First Metro Bank scored 20 out of a possible 30 on Bankrate's earnings test, beating the national average of 16.52.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for First Metro Bank was 11.33 percent, above the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank reported net income of $3.7 million on total equity of $67.7 million. The bank had an annualized return on average assets, or ROA, of 1.28 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.