How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Banks that are losing money, however, are less able to do those things.
On Bankrate's earnings test, The First National Bank of Floydada scored 26 out of a possible 30, beating the national average of 15.12.
One important way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. The First National Bank of Floydada's most recent annualized quarterly return on equity was 16.06 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $1.8 million on total equity of $11.3 million. The bank had an annualized return on average assets, or ROA, of 1.74 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.