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, take away from a bank's ability to do those things.
First State Bank scored 14 out of a possible 30 on Bankrate's test of earnings, failing to reach the national average of 15.12.
One important measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. First State Bank's most recent annualized quarterly return on equity was 6.28 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $743,000 on total equity of $11.9 million. The bank had an annualized return on average assets, or ROA, of 0.64 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.