How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money are less able to do those things.
MidWestOne Bank underperformed the average on Bankrate's earnings test, achieving a score of 12 out of a possible 30.
One key way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The most recent annualized quarterly return on equity for MidWestOne Bank was 5.85 percent, below the national average of 8.10 percent.
The bank recorded net income of $21.0 million on total equity of $365.1 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.67 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.