A bank's earnings performance 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 address problematic loans, potentially making the bank better able to withstand economic trouble. Obviously, banks that are losing money are less able to do those things.
On Bankrate's test of earnings, The Peoples State Bank scored 14 out of a possible 30, lower than the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important measure of a bank's earnings. The Peoples State Bank's most recent annualized quarterly return on equity was 6.26 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $292,000 on total equity of $4.6 million. The bank experienced an annualized return on average assets, or ROA, of 1.66 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.