A bank's earnings performance has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in times of trouble. Conversely, losses take away from a bank's ability to do those things.
The First National Bank of Park Falls outperformed the average on Bankrate's earnings test, achieving a score of 20 out of a possible 30.
One important measure of a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. The First National Bank of Park Falls's most recent annualized quarterly return on equity was 12.08 percent, above the national average of 8.10 percent.
The bank recorded net income of $1.7 million on total equity of $14.4 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.25 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.