A bank's earnings performance affects its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, likely making the bank more resilient in tough times. Conversely, losses lessen a bank's ability to do those things.
Five Star Bank received above-average marks on Bankrate's earnings test, achieving a score of 18 out of a possible 30.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. Five Star Bank's most recent annualized quarterly return on equity was 9.62 percent, above the national average of 9.28 percent.
The bank earned net income of $15.9 million on total equity of $347.7 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.84 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.