How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, boosting its capital buffer, or be used to address problematic loans, likely making the bank better prepared to withstand economic trouble. Banks that are losing money, however, have less ability to do those things.
First Bank of Pike scored 12 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one widely used measure of a bank's earnings. First Bank of Pike's most recent annualized quarterly return on equity was 5.28 percent, below the national average of 8.10 percent.
The bank earned net income of $221,000 on total equity of $4.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.50 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.