A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Banks that are losing money, however, have less ability to do those things.
On Bankrate's test of earnings, IAB Financial Bank scored 16 out of a possible 30, less than the national average of 16.52.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. IAB Financial Bank's most recent annualized quarterly return on equity was 7.84 percent, below the national average of 9.28 percent.
The bank recorded net income of $5.1 million on total equity of $133.0 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.94 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.