How profitable a bank is affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses take away from a bank's ability to do those things.
Iowa State Bank and Trust Company of Fairfield, Iowa did below-average on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Iowa State Bank and Trust Company of Fairfield, Iowa's most recent annualized quarterly return on equity was 5.68 percent, below the national average of 8.10 percent.
The bank reported net income of $699,000 on total equity of $12.4 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.55 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.