A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, take away from a bank's ability to do those things.
First Bank of Tennessee scored 22 out of a possible 30 on Bankrate's test of earnings, beating the national average of 15.12.
One important way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. First Bank of Tennessee's most recent annualized quarterly return on equity was 14.17 percent, above the national average of 8.10 percent.
The bank reported net income of $4.5 million on total equity of $31.9 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.46 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.