A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, likely making the bank better prepared to withstand economic shocks. Losses, on the other hand, diminish a bank's ability to do those things.
First Community Bank of East Tennessee scored 14 out of a possible 30 on Bankrate's earnings test, lower than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. First Community Bank of East Tennessee's most recent annualized quarterly return on equity was 6.45 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $1.4 million on total equity of $20.6 million. The bank reported 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.