How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, likely making the bank better able to withstand financial shocks. Obviously, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, First State Bank of Clearbrook scored 2 out of a possible 30, below the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. First State Bank of Clearbrook's most recent annualized quarterly return on equity was 0.33 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $15,000 on total equity of $5.8 million. The bank reported an annualized return on average assets, or ROA, of 0.03 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.