A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, boosting its capital cushion, or be used to address problematic loans, potentially making the bank better able to withstand economic trouble. Obviously, banks that are losing money are less able to do those things.
On Bankrate's earnings test, First State Bank scored 18 out of a possible 30, better than the national average of 15.12.
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 was 9.83 percent, above the national average of 8.10 percent.
The bank recorded net income of $554,000 on total equity of $5.7 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.15 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.