A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money are less able to do those things.
Pinnacle Bank scored 10 out of a possible 30 on Bankrate's earnings test, below 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 the total amount of equity. Pinnacle Bank's most recent annualized quarterly return on equity was 6.20 percent, below the national average of 8.10 percent.
The bank earned net income of $184.4 million on total equity of $3.86 billion for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.06 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.