A bank's profitability has an effect on its long-term survivability. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank better prepared to withstand economic shocks. Conversely, losses diminish a bank's ability to do those things.
Peoples State Bank fell behind the national average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for Peoples State Bank was 4.43 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $327,000 on total equity of $7.5 million. The bank experienced an annualized return on average assets, or ROA, of 0.40 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.