How profitable a bank is has an effect on its long-term survivability. Earnings may be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses diminish a bank's ability to do those things.
First State Bank Southwest scored 26 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for First State Bank Southwest was 17.34 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $4.7 million on total equity of $27.6 million. The bank experienced an annualized return on average assets, or ROA, of 1.79 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.