How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, likely making the bank better able to withstand economic trouble. Losses, on the other hand, diminish a bank's ability to do those things.
Phelps County Bank scored 30 out of a possible 30 on Bankrate's earnings test, beating the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. The most recent annualized quarterly return on equity for Phelps County Bank was 20.21 percent, above the national average of 8.10 percent.
The bank recorded net income of $5.2 million on total equity of $25.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.37 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.