How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, potentially making the bank more resilient in tough times. Conversely, losses take away from a bank's ability to do those things.
First State Bank scored 24 out of a possible 30 on Bankrate's earnings test, better than the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for First State Bank was 15.02 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $3.3 million on total equity of $22.2 million. The bank reported an annualized return on average assets, or ROA, of 1.45 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.