A bank's profitability has an effect on its long-term survivability. Earnings may be retained by the bank, increasing its capital buffer, or be used to address problematic loans, likely making the bank better able to withstand financial trouble. Losses, on the other hand, take away from a bank's ability to do those things.
First Federal Savings Bank of Lincolnton did below-average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. First Federal Savings Bank of Lincolnton's most recent annualized quarterly return on equity was 4.88 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $2.7 million on total equity of $56.0 million. The bank experienced an annualized return on average assets, or ROA, of 0.72 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.