A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, potentially making the bank more resilient in tough times. 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.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. First State Bank's most recent annualized quarterly return on equity was 9.86 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $913,000 on total equity of $9.3 million. The bank experienced an annualized return on average assets, or ROA, of 0.74 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.