A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, potentially making the bank better prepared to withstand economic trouble. Losses, on the other hand, reduce a bank's ability to do those things.
Midwest Heritage Bank, FSB beat the national average on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. Midwest Heritage Bank, FSB's most recent annualized quarterly return on equity was 12.01 percent, above the national average of 8.10 percent.
The bank reported net income of $3.6 million on total equity of $30.7 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.