A bank's profitability affects its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, potentially making the bank better able to withstand economic trouble. Losses, on the other hand, reduce a bank's ability to do those things.
Midwest Regional Bank received above-average marks on Bankrate's earnings test, achieving a score of 16 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important measure of a bank's earnings. Midwest Regional Bank's most recent annualized quarterly return on equity was 7.99 percent, below the national average of 8.10 percent.
The bank reported net income of $3.7 million on total equity of $48.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.69 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.