A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, likely making the bank better prepared to withstand financial trouble. However, banks that are losing money are less able to do those things.
On Bankrate's test of earnings, PrimeSouth Bank scored 14 out of a possible 30, lower than the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, or net income (essentially profit) divided by total equity. PrimeSouth Bank's most recent annualized quarterly return on equity was 8.58 percent, above the national average of 8.10 percent.
The bank earned net income of $4.4 million on total equity of $64.5 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.98 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.