How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, diminish a bank's ability to do those things.
The First National Bank in Tremont scored 10 out of a possible 30 on Bankrate's test of earnings, failing to reach 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 way to measure a bank's earnings. The First National Bank in Tremont's most recent annualized quarterly return on equity was 4.12 percent, below the national average of 8.10 percent.
The bank reported net income of $564,000 on total equity of $13.8 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.48 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.