How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand financial trouble. Losses, on the other hand, lessen a bank's ability to do those things.
Prescott State Bank did below-average on Bankrate's earnings test, achieving a score of 6 out of a possible 30.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. Prescott State Bank's most recent annualized quarterly return on equity was 3.00 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $58,000 on total equity of $2.0 million. The bank experienced an annualized return on average assets, or ROA, of 0.43 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.