How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in tough times. Conversely, losses diminish a bank's ability to do those things.
First National Bank of Tennessee outperformed the average on Bankrate's test of earnings, achieving a score of 22 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. First National Bank of Tennessee's most recent annualized quarterly return on equity was 13.21 percent, above the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank recorded net income of $5.1 million on total equity of $79.7 million. The bank reported an annualized return on average assets, or ROA, of 1.25 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.