A bank's profitability affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, diminish a bank's ability to do those things.
On Bankrate's earnings test, First Federal Bank Littlefield, Texas scored 10 out of a possible 30, failing to reach the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important measure of a bank's earnings. First Federal Bank Littlefield, Texas's most recent annualized quarterly return on equity was 5.02 percent, below the national average of 8.10 percent.
The bank reported net income of $441,000 on total equity of $9.0 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.86 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.