A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the bank better able to withstand economic shocks. Obviously, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, First State Bank scored 14 out of a possible 30, coming in below the national average of 15.12.
One key way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. First State Bank's most recent annualized quarterly return on equity was 6.98 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $351,000 on total equity of $5.2 million. The bank reported 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.