A bank's profitability has an effect on its long-term survivability. Earnings may be retained by the bank, boosting its capital buffer, or be used to address problematic loans, potentially making the bank better prepared to withstand economic trouble. However, banks that are losing money are less able to do those things.
On Bankrate's test of earnings, Bank Star scored 8 out of a possible 30, failing to reach the national average of 15.12.
One important way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The most recent annualized quarterly return on equity for Bank Star was 3.99 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $303,000 on total equity of $7.7 million. The bank experienced an annualized return on average assets, or ROA, of 0.39 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.