How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the bank better prepared to withstand economic trouble. Losses, on the other hand, diminish a bank's ability to do those things.
The First National Bank of Waverly underperformed the average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important measure of a bank's earnings. The First National Bank of Waverly's most recent annualized quarterly return on equity was 4.36 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $672,000 on total equity of $15.1 million. The bank reported an annualized return on average assets, or ROA, of 0.40 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.