A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, likely making the bank better able to withstand economic trouble. However, banks that are losing money are less able to do those things.
First Federal Savings Bank of Washington 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 (profit, essentially) by the total amount of equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for First Federal Savings Bank of Washington was 0.42 percent, below the national average of 8.10 percent.
The bank reported net income of $39,000 on total equity of $9.3 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.06 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.