A bank's ability to earn money has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, likely making the bank better able to withstand economic shocks. Obviously, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, Peoples State Bank of Commerce scored 12 out of a possible 30, coming in below the national average of 16.52.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The most recent annualized quarterly return on equity for Peoples State Bank of Commerce was 5.49 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank recorded net income of $524,000 on total equity of $19.5 million. The bank experienced an annualized return on average assets, or ROA, of 0.65 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.