How profitable a bank is affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand financial shocks. However, banks that are losing money are less able to do those things.
Bank of Franklin scored 14 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Bank of Franklin's most recent annualized quarterly return on equity was 6.96 percent, below the national average of 8.10 percent.
The bank earned net income of $976,000 on total equity of $14.5 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.72 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.