A bank's profitability affects its long-term survivability. Earnings may be retained by the bank, increasing its capital buffer, or be used to address problematic loans, potentially making the bank better able to withstand economic trouble. Losses, on the other hand, lessen a bank's ability to do those things.
Five Star Bank received above-average marks on Bankrate's earnings test, achieving a score of 18 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important measure of a bank's earnings. Five Star Bank's most recent annualized quarterly return on equity was 10.21 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $35.5 million on total equity of $382.5 million. The bank had an annualized return on average assets, or ROA, of 0.92 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.