A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. Banks that are losing money, however, are less able to do those things.
On Bankrate's earnings test, Iowa State Bank scored 20 out of a possible 30, beating out the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Iowa State Bank was 10.99 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $6.7 million on total equity of $62.4 million. The bank experienced an annualized return on average assets, or ROA, of 1.80 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.