How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital cushion, or use them to address problematic loans, potentially making the bank better prepared to withstand financial shocks. Banks that are losing money, however, are less able to do those things.
On Bankrate's test of earnings, 1st State Bank of Mason City scored 16 out of a possible 30, lower than the national average of 16.52.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for 1st State Bank of Mason City was 7.98 percent, below the national average of 9.28 percent.
The bank reported net income of $146,000 on total equity of $3.7 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 1.04 percent, above the 1 percent deemed satisfactory in accordance with industry standards, but below the average for U.S. banks of 1.14 percent.