How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, potentially making the bank more resilient in tough times. Conversely, losses lessen a bank's ability to do those things.
First National Bank in Mahnomen outperformed the average on Bankrate's earnings test, achieving a score of 20 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. First National Bank in Mahnomen's most recent annualized quarterly return on equity was 10.67 percent, above the national average of 8.10 percent.
The bank earned net income of $940,000 on total equity of $8.8 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.94 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.