A bank's earnings performance affects its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money are less able to do those things.
First State Bank scored 0 out of a possible 30 on Bankrate's earnings test, lower than the national average of 15.12.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for First State Bank was -4.43 percent, below the national average of 8.10 percent.
The bank recorded net income of $-98,000 on total equity of $2.2 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of -0.46 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.