How profitable a bank is affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, likely making the bank better able to withstand economic shocks. However, banks that are losing money are less able to do those things.
Peoples State Bank of Wells received above-average marks on Bankrate's earnings test, achieving a score of 22 out of a possible 30.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Peoples State Bank of Wells's most recent annualized quarterly return on equity was 12.25 percent, above the national average of 8.10 percent.
The bank reported net income of $831,000 on total equity of $6.9 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.48 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.