A bank's profitability affects its long-term survivability. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to address problematic loans, likely making the bank better prepared to withstand economic trouble. Losses, on the other hand, reduce a bank's ability to do those things.
Tennessee State Bank exceeded the national average on Bankrate's earnings test, achieving a score of 16 out of a possible 30.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for Tennessee State Bank was 8.25 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $5.5 million on total equity of $68.8 million. The bank had an annualized return on average assets, or ROA, of 0.84 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.