A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, reduce a bank's ability to do those things.
Pinnacle Bank scored 18 out of a possible 30 on Bankrate's test of earnings, beating out 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, essentially) by total equity. The most recent annualized quarterly return on equity for Pinnacle Bank was 8.78 percent, above the national average of 8.10 percent.
The bank recorded net income of $2.1 million on total equity of $25.3 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.10 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.