A bank's ability to earn money affects its safety and soundness. Earnings may be retained by the bank, boosting its capital cushion, or be used to address problematic loans, potentially making the bank better prepared to withstand financial trouble. Conversely, losses lessen a bank's ability to do those things.
First Federal Savings and Loan Association fell short of the national average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one widely used measure of a bank's earnings. First Federal Savings and Loan Association's most recent annualized quarterly return on equity was 1.63 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $154,000 on total equity of $9.6 million. The bank reported an annualized return on average assets, or ROA, of 0.45 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.