A bank's ability to earn money affects its long-term survivability. Earnings may be retained by the bank, increasing its capital buffer, or be used to address problematic loans, likely making the bank better prepared to withstand economic shocks. Obviously, banks that are losing money are less able to do those things.
On Bankrate's earnings test, First State Bank scored 4 out of a possible 30, coming in below the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for First State Bank was 1.45 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $119,000 on total equity of $8.2 million. The bank reported an annualized return on average assets, or ROA, of 0.21 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.