How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Obviously, banks that are losing money have less ability to do those things.
Peoples Community Bank fell behind the national average on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one key measure of a bank's earnings. Peoples Community Bank's most recent annualized quarterly return on equity was 5.46 percent, below the national average of 8.10 percent.
The bank recorded net income of $848,000 on total equity of $15.8 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.47 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.