A bank's profitability affects its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or use them to address problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, take away from a bank's ability to do those things.
First State Bank outperformed the average on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important measure of a bank's earnings. First State Bank's most recent annualized quarterly return on equity was 12.08 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $1.2 million on total equity of $10.2 million. The bank had an annualized return on average assets, or ROA, of 0.98 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.