A bank's profitability affects its safety and soundness. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, likely making the bank better prepared to withstand economic trouble. However, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, First State Bank scored 22 out of a possible 30, better than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important measure of a bank's earnings. First State Bank's most recent annualized quarterly return on equity was 13.02 percent, above the national average of 8.10 percent.
The bank earned net income of $1.5 million on total equity of $11.7 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.48 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.