A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand financial shocks. Banks that are losing money, however, are less able to do those things.
Menard Bank fell short of the national average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for Menard Bank was 4.18 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $193,000 on total equity of $4.6 million. The bank reported an annualized return on average assets, or ROA, of 0.55 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.