A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, likely making the bank better able to withstand economic shocks. Conversely, losses diminish a bank's ability to do those things.
The First National Bank of McGregor scored 20 out of a possible 30 on Bankrate's earnings test, exceeding the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for The First National Bank of McGregor was 12.64 percent, above the national average of 8.10 percent.
The bank recorded net income of $3.0 million on total equity of $25.5 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.07 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.