A bank's earnings performance affects its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand economic shocks. Conversely, losses reduce a bank's ability to do those things.
The First National Bank of Sedan fell short of the national average on Bankrate's test of earnings, achieving a score of 0 out of a possible 30.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for The First National Bank of Sedan was -6.67 percent, below the national average of 8.10 percent.
The bank recorded net income of $-370,000 on total equity of $5.2 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of -0.63 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.