How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, likely making the bank better able to withstand economic shocks. Conversely, losses diminish a bank's ability to do those things.
The First State Bank scored 30 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important measure of a bank's earnings. The First State Bank's most recent annualized quarterly return on equity was 21.39 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $7.4 million on total equity of $34.9 million. The bank had an annualized return on average assets, or ROA, of 1.92 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.