A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money are less able to do those things.
On Bankrate's earnings test, Premier Bank of the South scored 20 out of a possible 30, exceeding the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. Premier Bank of the South's most recent annualized quarterly return on equity was 11.78 percent, above the national average of 8.10 percent.
The bank reported net income of $1.9 million on total equity of $16.5 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.09 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.