How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank better able to withstand economic trouble. However, banks that are losing money have less ability to do those things.
First State Bank of Ben Wheeler, Texas beat the national average on Bankrate's test of earnings, achieving a score of 22 out of a possible 30.
One key measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. First State Bank of Ben Wheeler, Texas's most recent annualized quarterly return on equity was 12.51 percent, above the national average of 8.10 percent.
The bank recorded net income of $2.2 million on total equity of $18.3 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.58 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.