A bank's earnings performance has an effect on its long-term survivability. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses lessen a bank's ability to do those things.
Prairie Mountain Bank scored 18 out of a possible 30 on Bankrate's earnings test, beating 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. Prairie Mountain Bank's most recent annualized quarterly return on equity was 10.45 percent, above the national average of 8.10 percent.
The bank earned net income of $888,000 on total equity of $8.9 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.97 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.