A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, potentially making the bank better prepared to withstand economic trouble. However, banks that are losing money are less able to do those things.
Pinnacle Bank scored 20 out of a possible 30 on Bankrate's test of earnings, beating out the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one widely used measure of a bank's earnings. Pinnacle Bank's most recent annualized quarterly return on equity was 11.00 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $2.9 million on total equity of $28.1 million. The bank had an annualized return on average assets, or ROA, of 1.51 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.