A bank's profitability affects its long-term survivability. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, likely making the bank better able to withstand economic trouble. Conversely, losses diminish a bank's ability to do those things.
First Federal Savings of Middletown scored 0 out of a possible 30 on Bankrate's earnings test, less than the national average of 15.12.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The most recent annualized quarterly return on equity for First Federal Savings of Middletown was -2.02 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $-1.1 million on total equity of $53.8 million. The bank reported an annualized return on average assets, or ROA, of -0.72 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.