How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand economic shocks. Losses, on the other hand, take away from a bank's ability to do those things.
On Bankrate's earnings test, Peoples National Bank of Kewanee scored 12 out of a possible 30, less than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. Peoples National Bank of Kewanee's most recent annualized quarterly return on equity was 5.60 percent, below the national average of 8.10 percent.
The bank recorded net income of $2.6 million on total equity of $47.5 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.07 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.