A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or use them to address problematic loans, likely making the bank better able to withstand economic shocks. Losses, on the other hand, diminish a bank's ability to do those things.
First National Bank of Chadron outperformed the average on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for First National Bank of Chadron was 10.97 percent, above the national average of 8.10 percent.
The bank earned net income of $1.9 million on total equity of $17.9 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.59 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.