A bank's earnings performance 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, likely making the bank better able to withstand financial shocks. However, banks that are losing money have less ability to do those things.
The First National Bank of Powhatan Point scored 12 out of a possible 30 on Bankrate's test of earnings, 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 total equity. The most recent annualized quarterly return on equity for The First National Bank of Powhatan Point was 6.17 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $280,000 on total equity of $5.0 million. The bank experienced an annualized return on average assets, or ROA, of 0.53 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.