How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank better prepared to withstand economic trouble. Losses, on the other hand, take away from a bank's ability to do those things.
First Commercial Bank fell behind the national average on Bankrate's test of earnings, achieving a score of 14 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one widely used measure of a bank's earnings. First Commercial Bank's most recent annualized quarterly return on equity was 6.52 percent, below the national average of 8.10 percent.
The bank reported net income of $1.8 million on total equity of $27.5 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.78 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.