A bank's profitability affects its long-term survivability. Earnings may be retained by the bank, boosting its capital cushion, or be used to address problematic loans, likely making the bank better prepared to withstand economic shocks. Conversely, losses reduce a bank's ability to do those things.
Iowa State Savings Bank beat the national average on Bankrate's earnings test, achieving a score of 26 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. Iowa State Savings Bank's most recent annualized quarterly return on equity was 17.48 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $2.3 million on total equity of $13.7 million. The bank reported an annualized return on average assets, or ROA, of 1.44 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.