How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, likely making the bank better able to withstand financial shocks. Losses, on the other hand, take away from a bank's ability to do those things.
Providence Bank fell behind the national average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Providence Bank was -31.71 percent, below the national average of 8.10 percent.
The bank recorded net income of $-3.7 million on total equity of $12.6 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of -3.63 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.