A bank's earnings performance affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses reduce a bank's ability to do those things.
The Poplar Grove State Bank fell short of the national average on Bankrate's earnings test, achieving a score of 14 out of a possible 30.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The Poplar Grove State Bank's most recent annualized quarterly return on equity was 6.25 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $1.3 million on total equity of $21.3 million. The bank had an annualized return on average assets, or ROA, of 1.56 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.