A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, likely making the bank better prepared to withstand economic shocks. Conversely, losses reduce a bank's ability to do those things.
On Bankrate's earnings test, Great Midwest Bank, S.S.B. scored 8 out of a possible 30, 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 important way to measure a bank's earnings. Great Midwest Bank, S.S.B.'s most recent annualized quarterly return on equity was 3.76 percent, below the national average of 8.10 percent.
The bank recorded net income of $4.3 million on total equity of $116.6 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.61 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.