How profitable a bank is affects its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, likely making the bank better prepared to withstand financial trouble. Losses, on the other hand, reduce a bank's ability to do those things.
First State Bank received above-average marks on Bankrate's earnings test, achieving a score of 22 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one widely used measure of a bank's earnings. First State Bank's most recent annualized quarterly return on equity was 13.47 percent, above the national average of 8.10 percent.
The bank recorded net income of $2.2 million on total equity of $17.0 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.50 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.