How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, increasing its capital buffer, or use them to deal with problematic loans, likely making the bank better prepared to withstand financial trouble. However, banks that are losing money are less able to do those things.
Pinnacle Bank scored 0 out of a possible 30 on Bankrate's earnings test, less than the national average of 15.12.
One important 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 Pinnacle Bank was -1.38 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $-30,000 on total equity of $2.0 million. The bank experienced an annualized return on average assets, or ROA, of -0.03 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.