How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, likely making the bank better able to withstand financial trouble. However, banks that are losing money are less able to do those things.
First National Bank in Philip scored 22 out of a possible 30 on Bankrate's test of earnings, beating the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important measure of a bank's earnings. First National Bank in Philip's most recent annualized quarterly return on equity was 14.45 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $4.5 million on total equity of $32.6 million. The bank experienced an annualized return on average assets, or ROA, of 1.75 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.