A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them to address problematic loans, potentially making the bank more resilient in tough times. Conversely, losses take away from a bank's ability to do those things.
First Savanna Savings Bank scored 0 out of a possible 30 on Bankrate's test of earnings, failing to reach the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. First Savanna Savings Bank's most recent annualized quarterly return on equity was -3.79 percent, below the national average of 8.10 percent.
The bank recorded net income of $-53,000 on total equity of $1.4 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of -0.41 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.