A bank's profitability affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in tough times. Obviously, banks that are losing money have less ability to do those things.
First State Bank of St. Peter scored 18 out of a possible 30 on Bankrate's earnings test, exceeding the national average of 15.12.
One important way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The most recent annualized quarterly return on equity for First State Bank of St. Peter was 8.77 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $396,000 on total equity of $4.6 million. The bank had an annualized return on average assets, or ROA, of 1.37 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.