How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, potentially making the bank better prepared to withstand financial shocks. Obviously, banks that are losing money are less able to do those things.
Iowa Prairie Bank outperformed the average on Bankrate's earnings test, achieving a score of 20 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Iowa Prairie Bank was 10.09 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $563,000 on total equity of $5.5 million. The bank reported an annualized return on average assets, or ROA, of 0.83 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.