A bank's earnings performance affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. Banks that are losing money, however, are less able to do those things.
First Federal Savings Bank scored 14 out of a possible 30 on Bankrate's earnings test, 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 widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for First Federal Savings Bank was 6.63 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $2.9 million on total equity of $44.6 million. The bank had an annualized return on average assets, or ROA, of 0.77 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.