A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to address problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, lessen a bank's ability to do those things.
State Bank of Waterloo underperformed the average on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.
One key measure of a bank's earnings is return on equity, or net income (essentially profit) divided by total equity. State Bank of Waterloo's most recent annualized quarterly return on equity was 2.34 percent, below the national average of 8.10 percent.
The bank earned net income of $335,000 on total equity of $14.3 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.21 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.