A bank's profitability has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand economic shocks. Conversely, losses take away from a bank's ability to do those things.
Interstate Federal Savings and Loan Association of McGregor scored 4 out of a possible 30 on Bankrate's test of earnings, coming in below the national average of 15.12.
One important measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. The most recent annualized quarterly return on equity for Interstate Federal Savings and Loan Association of McGregor was 1.51 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $26,000 on total equity of $1.7 million. The bank experienced an annualized return on average assets, or ROA, of 0.33 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.