A bank's ability to earn money affects its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. Losses, on the other hand, reduce a bank's ability to do those things.
On Bankrate's earnings test, Iowa State Bank scored 18 out of a possible 30, above the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. Iowa State Bank's most recent annualized quarterly return on equity was 8.46 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $3.0 million on total equity of $36.5 million. The bank had an annualized return on average assets, or ROA, of 0.99 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.