A bank's ability to earn money has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial shocks. Conversely, losses take away from a bank's ability to do those things.
On Bankrate's earnings test, The Old Point National Bank of Phoebus scored 2 out of a possible 30, lower than the national average of 15.12.
One important measure of a bank's earnings is return on equity, or net income (essentially profit) divided by total equity. The Old Point National Bank of Phoebus's most recent annualized quarterly return on equity was 0.08 percent, below the national average of 8.10 percent.
The bank recorded net income of $68,000 on total equity of $87.5 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.01 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.