A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand financial trouble. Losses, on the other hand, take away from a bank's ability to do those things.
On Bankrate's test of earnings, Peoples State Bank scored 18 out of a possible 30, above the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Peoples State Bank's most recent annualized quarterly return on equity was 8.90 percent, above the national average of 8.10 percent.
The bank recorded net income of $881,000 on total equity of $9.9 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.81 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.