A bank's profitability affects its long-term survivability. Earnings can be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money are less able to do those things.
First State Bank of Decatur fell behind the national average on Bankrate's earnings test, achieving a score of 8 out of a possible 30.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. First State Bank of Decatur's most recent annualized quarterly return on equity was 3.08 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $340,000 on total equity of $10.3 million. The bank had an annualized return on average assets, or ROA, of 0.61 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.