How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand financial trouble. Conversely, losses diminish a bank's ability to do those things.
First State Bank of the South, Inc. fell behind the national average on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for First State Bank of the South, Inc. was 3.79 percent, below the national average of 8.10 percent.
The bank earned net income of $600,000 on total equity of $15.6 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.60 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.