How profitable a bank is affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the bank better prepared to withstand economic shocks. Losses, on the other hand, reduce a bank's ability to do those things.
State Bank beat the national average on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. State Bank's most recent annualized quarterly return on equity was 10.18 percent, above the national average of 8.10 percent.
The bank recorded net income of $4.2 million on total equity of $37.9 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.12 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.