How profitable a bank is affects its long-term survivability. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.
On Bankrate's earnings test, First South Bank scored 0 out of a possible 30, lower than the national average of 15.12.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. First South Bank's most recent annualized quarterly return on equity was -5.88 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $-949,000 on total equity of $21.2 million. The bank experienced an annualized return on average assets, or ROA, of -0.40 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.