How profitable a bank is affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.
On Bankrate's earnings test, Powell State Bank scored 10 out of a possible 30, failing to reach the national average of 15.12.
One key measure of a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. Powell State Bank's most recent annualized quarterly return on equity was 4.20 percent, below the national average of 8.10 percent.
The bank reported net income of $133,000 on total equity of $3.1 million for the twelve months ended December 31, 2017. 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.