How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand economic trouble. However, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, The Paducah Bank and Trust Company scored 24 out of a possible 30, above the national average of 15.12.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The Paducah Bank and Trust Company's most recent annualized quarterly return on equity was 14.19 percent, above the national average of 8.10 percent.
The bank reported net income of $10.6 million on total equity of $75.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.69 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.