How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses reduce a bank's ability to do those things.
FNCB Bank received below-average marks on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. FNCB Bank's most recent annualized quarterly return on equity was 0.97 percent, below the national average of 8.10 percent.
The bank earned net income of $1.1 million on total equity of $104.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.10 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.