How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, likely making the bank better prepared to withstand financial shocks. Banks that are losing money, however, have less ability to do those things.
On Bankrate's test of earnings, Siouxland Bank scored 12 out of a possible 30, falling short of the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one key measure of a bank's earnings. Siouxland Bank's most recent annualized quarterly return on equity was 5.28 percent, below the national average of 8.10 percent.
The bank recorded net income of $267,000 on total equity of $5.1 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.49 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.