How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.
The First National Bank of Lacon did above-average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The First National Bank of Lacon's most recent annualized quarterly return on equity was 8.69 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $467,000 on total equity of $5.4 million. The bank experienced an annualized return on average assets, or ROA, of 0.74 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.