How profitable a bank is has an effect on its long-term survivability. Earnings can be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial shocks. Losses, on the other hand, diminish a bank's ability to do those things.
Bank of the West scored 10 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 16.52.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. Bank of the West's most recent annualized quarterly return on equity was 4.27 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank recorded net income of $259.6 million on total equity of $12.24 billion. The bank reported an annualized return on average assets, or ROA, of 0.61 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.