How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Obviously, banks that are losing money have less ability to do those things.
Providence Bank scored 14 out of a possible 30 on Bankrate's earnings test, falling short of 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. Providence Bank's most recent annualized quarterly return on equity was 6.82 percent, below the national average of 8.10 percent.
The bank recorded net income of $9.7 million on total equity of $146.4 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.02 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.