A bank's earnings performance has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, likely making the bank better prepared to withstand economic shocks. Conversely, losses reduce a bank's ability to do those things.
First Peoples Bank of Tennessee scored 12 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 15.12.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for First Peoples Bank of Tennessee was 5.33 percent, below the national average of 8.10 percent.
The bank reported net income of $669,000 on total equity of $12.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.46 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.