How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand economic trouble. However, banks that are losing money have less ability to do those things.
First State Bank scored 20 out of a possible 30 on Bankrate's test of earnings, beating 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 total equity. The most recent annualized quarterly return on equity for First State Bank was 11.77 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $516,000 on total equity of $4.4 million. The bank experienced an annualized return on average assets, or ROA, of 1.06 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.