How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, likely making the bank better able to withstand economic trouble. Losses, on the other hand, reduce a bank's ability to do those things.
On Bankrate's earnings test, First Southern Bank scored 18 out of a possible 30, beating out the national average of 15.12.
One important measure of a bank's earnings is return on equity, or net income (essentially profit) divided by total equity. First Southern Bank's most recent annualized quarterly return on equity was 9.06 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $1.8 million on total equity of $20.5 million. The bank experienced an annualized return on average assets, or ROA, of 0.95 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.