A bank's earnings performance affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to address 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.
First New Mexico Bank of Silver City outperformed the average on Bankrate's earnings test, achieving a score of 20 out of a possible 30.
One key measure of a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The most recent annualized quarterly return on equity for First New Mexico Bank of Silver City was 10.89 percent, above the national average of 8.10 percent.
The bank reported net income of $1.4 million on total equity of $12.7 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.26 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.