How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the bank better able to withstand economic shocks. Obviously, banks that are losing money are less able to do those things.
On Bankrate's test of earnings, First Financial Bank in Winnebago scored 16 out of a possible 30, beating the national average of 15.12.
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. First Financial Bank in Winnebago's most recent annualized quarterly return on equity was 7.12 percent, below the national average of 8.10 percent.
The bank recorded net income of $488,000 on total equity of $6.8 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.10 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.