A bank's ability to earn money has an effect on its long-term survivability. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses diminish a bank's ability to do those things.
The First National Bank of Tahoka scored 20 out of a possible 30 on Bankrate's earnings test, above the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. The First National Bank of Tahoka's most recent annualized quarterly return on equity was 9.70 percent, above the national average of 8.10 percent.
The bank recorded net income of $562,000 on total equity of $5.6 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.01 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.