A bank's ability to earn money affects its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial trouble. Conversely, losses reduce a bank's ability to do those things.
On Bankrate's earnings test, First State Bank scored 16 out of a possible 30, exceeding the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. First State Bank's most recent annualized quarterly return on equity was 7.94 percent, below the national average of 8.10 percent.
The bank earned net income of $354,000 on total equity of $4.6 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.83 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.