How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or use them to address problematic loans, likely making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.
First State Bank fell behind the national average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.
One key measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. First State Bank's most recent annualized quarterly return on equity was 4.52 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank reported net income of $129,000 on total equity of $5.7 million. The bank had an annualized return on average assets, or ROA, of 0.62 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.