How profitable a bank is affects its long-term survivability. Earnings can 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 prepared to withstand economic trouble. Banks that are losing money, however, have less ability to do those things.
The First National Bank of Lipan fell behind the national average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.
One key way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. The most recent annualized quarterly return on equity for The First National Bank of Lipan was 1.64 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $30,000 on total equity of $1.8 million. The bank had an annualized return on average assets, or ROA, of 0.14 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.