A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or use them to deal with problematic loans, likely making the bank more resilient in times of trouble. Conversely, losses lessen a bank's ability to do those things.
On Bankrate's earnings test, Peoples Bank of Kentucky, Inc. scored 16 out of a possible 30, exceeding the national average of 15.12.
One key measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. The most recent annualized quarterly return on equity for Peoples Bank of Kentucky, Inc. was 7.55 percent, below the national average of 8.10 percent.
The bank earned net income of $2.6 million on total equity of $34.9 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.92 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.