A bank's ability to earn money has an effect on its safety and soundness. Earnings can be retained by the bank, expanding its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.
On Bankrate's test of earnings, Mega Bank scored 10 out of a possible 30, less than the national average of 16.52.
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 most recent annualized quarterly return on equity for Mega Bank was 4.82 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank earned net income of $964,000 on total equity of $40.5 million. The bank experienced an annualized return on average assets, or ROA, of 0.59 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.