A bank's profitability has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.
On Bankrate's earnings test, Prairie Sun Bank scored 18 out of a possible 30, exceeding the national average of 15.12.
One key way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. Prairie Sun Bank's most recent annualized quarterly return on equity was 8.61 percent, above the national average of 8.10 percent.
The bank earned net income of $207,000 on total equity of $2.4 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.66 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.