How profitable a bank is affects its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand financial trouble. Losses, on the other hand, lessen a bank's ability to do those things.
First National Bank of Waterloo fell behind the national average on Bankrate's earnings test, achieving a score of 12 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important measure of a bank's earnings. First National Bank of Waterloo's most recent annualized quarterly return on equity was 6.00 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $3.0 million on total equity of $50.1 million. The bank reported an annualized return on average assets, or ROA, of 0.65 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.