A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to address problematic loans, potentially making the bank better prepared to withstand economic shocks. Losses, on the other hand, diminish a bank's ability to do those things.
On Bankrate's earnings test, The First National Bank of Pandora scored 14 out of a possible 30, failing to reach the national average of 15.12.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. The most recent annualized quarterly return on equity for The First National Bank of Pandora was 6.72 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $923,000 on total equity of $13.8 million. The bank reported an annualized return on average assets, or ROA, of 0.58 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.