How profitable a bank is affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to deal with problematic loans, likely making the bank more resilient in tough times. Obviously, banks that are losing money are less able to do those things.
First Neodesha Bank scored 26 out of a possible 30 on Bankrate's earnings test, beating out the national average of 15.12.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. First Neodesha Bank's most recent annualized quarterly return on equity was 16.96 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $1.5 million on total equity of $9.4 million. The bank had an annualized return on average assets, or ROA, of 1.62 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.