How profitable a bank is has an effect on its long-term survivability. Earnings can be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, reduce a bank's ability to do those things.
Peoples State Bank, Fairmount, N. D. scored 12 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. Peoples State Bank, Fairmount, N. D.'s most recent annualized quarterly return on equity was 5.08 percent, below the national average of 8.10 percent.
The bank recorded net income of $95,000 on total equity of $1.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.35 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.