A bank's ability to earn money affects its long-term survivability. A bank can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.
The First State Bank, Kiowa, Kansas fell behind the national average on Bankrate's earnings test, achieving a score of 4 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one key measure of a bank's earnings. The First State Bank, Kiowa, Kansas's most recent annualized quarterly return on equity was 1.22 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $124,000 on total equity of $10.0 million. The bank reported an annualized return on average assets, or ROA, of 0.19 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.