A bank's ability to earn money has an effect on its safety and soundness. Earnings can be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank better able to withstand financial shocks. However, banks that are losing money are less able to do those things.
First Missouri State Bank of Cape County beat the national average on Bankrate's earnings test, achieving a score of 22 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. First Missouri State Bank of Cape County's most recent annualized quarterly return on equity was 13.66 percent, above the national average of 8.10 percent.
The bank reported net income of $1.6 million on total equity of $12.2 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.12 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.