How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.
First Federal Bank scored 0 out of a possible 30 on Bankrate's test of earnings, coming in below the national average of 15.12.
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. First Federal Bank's most recent annualized quarterly return on equity was -2.33 percent, below the national average of 8.10 percent.
The bank recorded net income of $-475,000 on total equity of $20.0 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of -0.27 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.