A bank's profitability affects its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the bank better able to withstand economic shocks. Banks that are losing money, however, have less ability to do those things.
First Palmetto Bank scored 12 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one key measure of a bank's earnings. First Palmetto Bank's most recent annualized quarterly return on equity was 5.66 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $4.5 million on total equity of $78.6 million. The bank had an annualized return on average assets, or ROA, of 0.70 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.