A bank's ability to earn money affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.
Iowa Trust and Savings Bank scored 24 out of a possible 30 on Bankrate's test of earnings, above the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. Iowa Trust and Savings Bank's most recent annualized quarterly return on equity was 13.88 percent, above the national average of 8.10 percent.
The bank earned net income of $2.5 million on total equity of $17.9 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.42 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.