A bank's profitability affects its long-term survivability. Earnings can be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial trouble. However, banks that are losing money are less able to do those things.
Peoples Bank received above-average marks on Bankrate's test of earnings, achieving a score of 18 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. Peoples Bank's most recent annualized quarterly return on equity was 9.75 percent, above the national average of 8.10 percent.
The bank earned net income of $717,000 on total equity of $7.7 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.81 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.