A bank's ability to earn money affects its long-term survivability. Earnings can be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses reduce a bank's ability to do those things.
Pinnacle Bank scored 24 out of a possible 30 on Bankrate's earnings test, beating the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important measure of a bank's earnings. Pinnacle Bank's most recent annualized quarterly return on equity was 15.38 percent, above the national average of 8.10 percent.
The bank reported net income of $15.5 million on total equity of $104.6 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.81 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.