A bank's profitability affects its long-term survivability. A bank can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, likely making the bank better prepared to withstand financial shocks. However, banks that are losing money are less able to do those things.
First State Bank outperformed the average on Bankrate's test of earnings, achieving a score of 24 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. First State Bank's most recent annualized quarterly return on equity was 15.96 percent, above the national average of 8.10 percent.
The bank reported net income of $2.2 million on total equity of $13.7 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.50 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.