A bank's profitability affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, likely making the bank better prepared to withstand economic shocks. Banks that are losing money, however, have less ability to do those things.
On Bankrate's test of earnings, First State Bank scored 10 out of a possible 30, falling short of the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for First State Bank was 5.58 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $4.9 million on total equity of $104.4 million. The bank experienced an annualized return on average assets, or ROA, of 0.50 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.