How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, diminish a bank's ability to do those things.
On Bankrate's earnings test, First National Bank of Giddings scored 12 out of a possible 30, coming in below the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one key measure of a bank's earnings. First National Bank of Giddings's most recent annualized quarterly return on equity was 5.50 percent, below the national average of 8.10 percent.
The bank recorded net income of $1.1 million on total equity of $20.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.61 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.