A bank's profitability has an effect on its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, take away from a bank's ability to do those things.
The Peoples Bank of Red Level did above-average on Bankrate's test of earnings, achieving a score of 16 out of a possible 30.
One important measure of a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. The most recent annualized quarterly return on equity for The Peoples Bank of Red Level was 7.14 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $135,000 on total equity of $1.8 million. The bank reported an annualized return on average assets, or ROA, of 0.82 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.