How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, likely making the bank better able to withstand financial trouble. Conversely, losses diminish a bank's ability to do those things.
Passumpsic Savings Bank fell behind the national average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for Passumpsic Savings Bank was 4.93 percent, below the national average of 8.10 percent.
The bank reported net income of $3.7 million on total equity of $76.4 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.57 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.