A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. Obviously, banks that are losing money are less able to do those things.
First Federal Bank & Trust underperformed the average on Bankrate's earnings test, achieving a score of 2 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. First Federal Bank & Trust's most recent annualized quarterly return on equity was 0.89 percent, below the national average of 8.10 percent.
The bank earned net income of $369,000 on total equity of $41.6 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.13 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.