A bank's ability to earn money affects its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.
Four Oaks Bank & Trust Company scored 14 out of a possible 30 on Bankrate's test of earnings, failing to reach the national average of 16.52.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. The most recent annualized quarterly return on equity for Four Oaks Bank & Trust Company was 6.52 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank earned net income of $2.9 million on total equity of $91.2 million. The bank experienced an annualized return on average assets, or ROA, of 0.80 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.