A bank's profitability affects its long-term survivability. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, potentially making the bank better prepared to withstand financial shocks. Losses, on the other hand, reduce a bank's ability to do those things.
Peoples Bank and Trust Company of Madison County fell behind the national average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.
One important way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The most recent annualized quarterly return on equity for Peoples Bank and Trust Company of Madison County was 4.22 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $2.3 million on total equity of $53.2 million. The bank experienced 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.