A bank's profitability affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to address problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money are less able to do those things.
The First National Bank of Germantown scored 2 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 15.12.
One key measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The First National Bank of Germantown's most recent annualized quarterly return on equity was 0.41 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $20,000 on total equity of $4.8 million. The bank experienced an annualized return on average assets, or ROA, of 0.04 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.