A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, likely making the bank better able to withstand economic shocks. However, banks that are losing money are less able to do those things.
The Bank of Princeton fell behind the national average on Bankrate's test of earnings, achieving a score of 14 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for The Bank of Princeton was 8.38 percent, above the national average of 8.10 percent.
The bank earned net income of $11.0 million on total equity of $168.3 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.01 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.