A bank's profitability affects 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 better able to withstand economic trouble. However, banks that are losing money have less ability to do those things.
First State Bank Shannon-Polo did above-average on Bankrate's earnings test, achieving a score of 20 out of a possible 30.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. First State Bank Shannon-Polo's most recent annualized quarterly return on equity was 11.59 percent, above the national average of 8.10 percent.
The bank reported net income of $2.0 million on total equity of $17.1 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.25 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.