A bank's profitability affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, likely making the bank better able to withstand financial shocks. Losses, on the other hand, lessen a bank's ability to do those things.
Pelham Banking Company did below-average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Pelham Banking Company was 1.24 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $114,000 on total equity of $6.1 million. The bank had an annualized return on average assets, or ROA, of 0.15 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.