How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.
First Trust and Savings Bank scored 12 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 15.12.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. First Trust and Savings Bank's most recent annualized quarterly return on equity was 5.15 percent, below the national average of 8.10 percent.
The bank reported net income of $301,000 on total equity of $5.9 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.58 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.