How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, potentially making the bank better able to withstand financial shocks. Obviously, banks that are losing money are less able to do those things.
On Bankrate's earnings test, Peoples Savings Bank scored 10 out of a possible 30, failing to reach the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one widely used measure of a bank's earnings. Peoples Savings Bank's most recent annualized quarterly return on equity was 4.81 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $426,000 on total equity of $8.8 million. The bank had an annualized return on average assets, or ROA, of 0.45 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.