A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, potentially making the bank better prepared to withstand economic shocks. Obviously, banks that are losing money have less ability to do those things.
First Capital Bank scored 2 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 15.12.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The most recent annualized quarterly return on equity for First Capital Bank was 0.85 percent, below the national average of 8.10 percent.
The bank earned net income of $90,000 on total equity of $20.0 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.16 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.