How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, take away from a bank's ability to do those things.
The First National Bank of Primghar underperformed the average on Bankrate's earnings test, achieving a score of 8 out of a possible 30.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The First National Bank of Primghar's most recent annualized quarterly return on equity was 3.71 percent, below the national average of 8.10 percent.
The bank recorded net income of $202,000 on total equity of $5.5 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.64 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.