A bank's profitability affects its long-term survivability. A bank can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, potentially making the bank better able to withstand financial shocks. Conversely, losses diminish a bank's ability to do those things.
Advantage Bank scored 10 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 16.52.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. Advantage Bank's most recent annualized quarterly return on equity was 4.09 percent, below the national average of 9.28 percent.
The bank recorded net income of $156,000 on total equity of $7.8 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 0.52 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.