A bank's earnings performance affects its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand economic shocks. However, banks that are losing money have less ability to do those things.
Prime Bank outperformed the average on Bankrate's earnings test, achieving a score of 30 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for Prime Bank was 24.91 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $7.2 million on total equity of $31.7 million. The bank reported an annualized return on average assets, or ROA, of 2.76 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.