A bank's earnings performance affects its long-term survivability. Earnings may be retained by the bank, boosting its capital buffer, or be used to address problematic loans, potentially making the bank better able to withstand financial shocks. Losses, on the other hand, reduce a bank's ability to do those things.
On Bankrate's earnings test, The First State Bank of Arcadia scored 22 out of a possible 30, beating out the national average of 15.12.
One key way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by total equity. The First State Bank of Arcadia's most recent annualized quarterly return on equity was 12.08 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $2.0 million on total equity of $16.3 million. The bank experienced an annualized return on average assets, or ROA, of 1.40 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.