How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital cushion, or be used to address problematic loans, likely making the bank better able to withstand financial shocks. However, banks that are losing money are less able to do those things.
On Bankrate's test of earnings, Iowa Savings Bank scored 26 out of a possible 30, beating the national average of 15.12.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for Iowa Savings Bank was 16.82 percent, above the national average of 8.10 percent.
The bank recorded net income of $2.8 million on total equity of $17.0 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.40 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.