How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial shocks. Conversely, losses reduce a bank's ability to do those things.
On Bankrate's test of earnings, The Peoples State Bank of Newton, Illinois scored 18 out of a possible 30, beating the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. The Peoples State Bank of Newton, Illinois's most recent annualized quarterly return on equity was 9.75 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $4.1 million on total equity of $43.3 million. The bank experienced an annualized return on average assets, or ROA, of 1.06 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.