A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or use them to address 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.
The Pauls Valley National Bank scored 16 out of a possible 30 on Bankrate's earnings test, better than the national average of 15.12.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The Pauls Valley National Bank's most recent annualized quarterly return on equity was 7.50 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $1.8 million on total equity of $24.5 million. The bank reported an annualized return on average assets, or ROA, of 0.76 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.