How profitable a bank is has an effect on its long-term survivability. Earnings can be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, are less able to do those things.
The First State Bank of Ransom scored 6 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 15.12.
One important way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The most recent annualized quarterly return on equity for The First State Bank of Ransom was 2.84 percent, below the national average of 8.10 percent.
The bank reported net income of $271,000 on total equity of $9.3 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.60 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.