A bank's ability to earn money has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital cushion, or be used to address problematic loans, likely making the bank better prepared to withstand economic shocks. However, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, Bank 21 scored 28 out of a possible 30, beating the national average of 16.52.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Bank 21 was 19.29 percent, above the national average of 9.28 percent.
The bank reported net income of $874,000 on total equity of $9.1 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 1.55 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.