A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, potentially making the bank better able to withstand financial shocks. Losses, on the other hand, take away from a bank's ability to do those things.
On Bankrate's earnings test, Bank Mutual scored 14 out of a possible 30, lower than the national average of 16.52.
One widely used measure of a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. Bank Mutual's most recent annualized quarterly return on equity was 6.21 percent, below the national average of 9.28 percent.
The bank reported net income of $8.1 million on total equity of $264.4 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.61 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.