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 deal with problematic loans, potentially making the bank more resilient in times of trouble. Banks that are losing money, however, have less ability to do those things.
First National Bank in Fredonia beat the national average on Bankrate's earnings test, achieving a score of 18 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 National Bank in Fredonia's most recent annualized quarterly return on equity was 8.24 percent, above the national average of 8.10 percent.
The bank recorded net income of $1.2 million on total equity of $15.1 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.32 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.