How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Conversely, losses diminish a bank's ability to do those things.
First City Bank fell behind the national average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important measure of a bank's earnings. First City Bank's most recent annualized quarterly return on equity was 4.45 percent, below the national average of 8.10 percent.
The bank earned net income of $318,000 on total equity of $7.3 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.54 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.