A bank's profitability affects its safety and soundness. Earnings can be retained by the bank, expanding its capital buffer, or be used to address problematic loans, likely making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.
Tucumcari Federal Savings and Loan Association received below-average marks on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.
One key way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. Tucumcari Federal Savings and Loan Association's most recent annualized quarterly return on equity was 1.32 percent, below the national average of 8.10 percent.
The bank earned net income of $67,000 on total equity of $5.1 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.20 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.