A bank's profitability affects its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, likely making the bank better able to withstand economic shocks. Banks that are losing money, however, are less able to do those things.
Independence Bank of Kentucky scored 28 out of a possible 30 on Bankrate's test of earnings, beating out the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Independence Bank of Kentucky was 20.65 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $31.9 million on total equity of $161.8 million. The bank had an annualized return on average assets, or ROA, of 1.51 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.