A bank's earnings performance affects its long-term survivability. Earnings may be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank better able to withstand economic shocks. Losses, on the other hand, reduce a bank's ability to do those things.
Pinnacle Bank exceeded the national average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.
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 Pinnacle Bank was 9.03 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $2.4 million on total equity of $27.0 million. The bank experienced an annualized return on average assets, or ROA, of 1.07 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.