How profitable a bank is affects its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or use them to address problematic loans, likely making the bank better prepared to withstand financial trouble. Losses, on the other hand, reduce a bank's ability to do those things.
Tecumseh Federal Bank scored 6 out of a possible 30 on Bankrate's earnings test, less than the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. The most recent annualized quarterly return on equity for Tecumseh Federal Bank was 2.92 percent, below the national average of 8.10 percent.
The bank recorded net income of $282,000 on total equity of $9.8 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.55 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.