A bank's profitability affects its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank better able to withstand economic shocks. However, banks that are losing money have less ability to do those things.
Piggott State Bank exceeded the national average on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for Piggott State Bank was 11.67 percent, above the national average of 8.10 percent.
The bank earned net income of $931,000 on total equity of $7.9 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.15 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.