How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, likely making the bank better prepared to withstand economic trouble. Obviously, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, First State Bank scored 2 out of a possible 30, less than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important measure of a bank's earnings. First State Bank's most recent annualized quarterly return on equity was 0.82 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $161,000 on total equity of $19.3 million. The bank reported an annualized return on average assets, or ROA, of 0.09 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.