How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, are less able to do those things.
McHenry Savings Bank fell short of the national average on Bankrate's test of earnings, achieving a score of 0 out of a possible 30.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. McHenry Savings Bank's most recent annualized quarterly return on equity was -11.48 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $-990,000 on total equity of $8.0 million. The bank had an annualized return on average assets, or ROA, of -0.42 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.