How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to address problematic loans, likely making the bank better able to withstand economic shocks. However, banks that are losing money are less able to do those things.
Penn Community Bank scored 8 out of a possible 30 on Bankrate's earnings test, lower than the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) 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 Penn Community Bank was 3.23 percent, below the national average of 8.10 percent.
The bank earned net income of $8.3 million on total equity of $264.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.43 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.