A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or use them to deal with problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, reduce a bank's ability to do those things.
On Bankrate's test of earnings, First State Bank scored 26 out of a possible 30, beating out 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, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for First State Bank was 17.74 percent, above the national average of 8.10 percent.
The bank recorded net income of $914,000 on total equity of $5.3 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.90 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.