How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. Losses, on the other hand, lessen a bank's ability to do those things.
State Bank of New Prague scored 22 out of a possible 30 on Bankrate's earnings test, beating the national average of 16.52.
One widely used measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. The most recent annualized quarterly return on equity for State Bank of New Prague was 12.47 percent, above the national average of 9.28 percent.
The bank earned net income of $908,000 on total equity of $14.9 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 1.59 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.