How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.
Ipava State Bank scored 22 out of a possible 30 on Bankrate's earnings test, beating out the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. The most recent annualized quarterly return on equity for Ipava State Bank was 13.64 percent, above the national average of 8.10 percent.
The bank reported net income of $1.5 million on total equity of $11.3 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.28 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.