How profitable a bank is has an effect on 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, potentially making the bank better able to withstand economic shocks. Banks that are losing money, however, have less ability to do those things.
First State Bank beat the national average on Bankrate's earnings test, achieving a score of 30 out of a possible 30.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. First State Bank's most recent annualized quarterly return on equity was 20.86 percent, above the national average of 8.10 percent.
The bank earned net income of $1.3 million on total equity of $6.5 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.79 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.