How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, likely 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, STAR Financial Bank scored 18 out of a possible 30, exceeding the national average of 16.52.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. STAR Financial Bank's most recent annualized quarterly return on equity was 8.72 percent, below the national average of 9.28 percent.
The bank recorded net income of $8.4 million on total equity of $198.4 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.91 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.