How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, expanding its capital buffer, or be used to address problematic loans, likely making the bank better able to withstand financial trouble. However, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, First American State Bank scored 8 out of a possible 30, lower than the national average of 15.12.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. First American State Bank's most recent annualized quarterly return on equity was 4.00 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $511,000 on total equity of $13.0 million. The bank had an annualized return on average assets, or ROA, of 0.53 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.