How profitable a bank is has an effect on its long-term survivability. Earnings may be retained by the bank, boosting its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, diminish a bank's ability to do those things.
On Bankrate's earnings test, First State Bank of Golva scored 26 out of a possible 30, beating the national average of 15.12.
One important measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. First State Bank of Golva's most recent annualized quarterly return on equity was 17.90 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $1.4 million on total equity of $8.2 million. The bank experienced an annualized return on average assets, or ROA, of 1.83 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.