A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, 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.
On Bankrate's test of earnings, Upper Peninsula 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 widely used measure of a bank's earnings. Upper Peninsula State Bank's most recent annualized quarterly return on equity was 6.40 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $2.0 million on total equity of $31.7 million. The bank had an annualized return on average assets, or ROA, of 1.08 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.