A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. However, banks that are losing money have less ability to do those things.
Forreston State Bank scored 18 out of a possible 30 on Bankrate's earnings test, above the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. Forreston State Bank's most recent annualized quarterly return on equity was 9.58 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $2.2 million on total equity of $23.5 million. The bank reported an annualized return on average assets, or ROA, of 1.14 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.