A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand economic trouble. Banks that are losing money, however, are less able to do those things.
Ottawa Savings Bank underperformed the average on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Ottawa Savings Bank was 2.06 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $859,000 on total equity of $42.0 million. The bank had an annualized return on average assets, or ROA, of 0.36 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.