How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.
On Bankrate's earnings test, Bank Northwest scored 30 out of a possible 30, above the national average of 16.52.
One key measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. Bank Northwest's most recent annualized quarterly return on equity was 22.98 percent, above the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank reported net income of $1.2 million on total equity of $10.7 million. The bank experienced an annualized return on average assets, or ROA, of 1.92 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.