How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to address problematic loans, likely making the bank more resilient in tough times. Obviously, banks that are losing money have less ability to do those things.
Peoples Bank of the South outperformed the average on Bankrate's test of earnings, achieving a score of 24 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one key measure of a bank's earnings. Peoples Bank of the South's most recent annualized quarterly return on equity was 16.02 percent, above the national average of 8.10 percent.
The bank reported net income of $3.3 million on total equity of $20.5 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 2.19 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.