How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, boosting its capital buffer, or be used to address problematic loans, likely making the bank better prepared to withstand financial trouble. However, banks that are losing money are less able to do those things.
On Bankrate's earnings test, Union Federal Savings and Loan Association scored 8 out of a possible 30, failing to reach the national average of 15.12.
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. Union Federal Savings and Loan Association's most recent annualized quarterly return on equity was 4.03 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $820,000 on total equity of $20.8 million. The bank experienced an annualized return on average assets, or ROA, of 0.54 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.