A bank's profitability affects its long-term survivability. A bank can retain its earnings, increasing its capital buffer, or use them to deal with problematic loans, likely making the bank better able to withstand financial shocks. Losses, on the other hand, take away from a bank's ability to do those things.
First State Bank of Odem scored 18 out of a possible 30 on Bankrate's test of earnings, beating out the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. First State Bank of Odem's most recent annualized quarterly return on equity was 8.40 percent, above the national average of 8.10 percent.
The bank recorded net income of $1.3 million on total equity of $15.0 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.94 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.