How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, take away from a bank's ability to do those things.
First State Bank of Fountain fell short of the national average on Bankrate's earnings test, achieving a score of 2 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. First State Bank of Fountain's most recent annualized quarterly return on equity was 0.21 percent, below the national average of 8.10 percent.
The bank recorded net income of $7,000 on total equity of $3.3 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.02 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.