A bank's ability to earn money has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, potentially making the bank better able to withstand financial shocks. Losses, on the other hand, lessen a bank's ability to do those things.
Peoples Bank of Alabama scored 0 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for Peoples Bank of Alabama was -0.89 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $-600,000 on total equity of $64.7 million. The bank reported an annualized return on average assets, or ROA, of -0.08 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.