A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, potentially making the bank better prepared to withstand economic trouble. Obviously, banks that are losing money are less able to do those things.
On Bankrate's test of earnings, City State Bank scored 24 out of a possible 30, beating the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for City State Bank was 15.03 percent, above the national average of 8.10 percent.
The bank reported net income of $4.7 million on total equity of $32.8 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.31 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.