A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand economic shocks. Banks that are losing money, however, have less ability to do those things.
On Bankrate's test of earnings, Alerus Financial, National Association scored 18 out of a possible 30, exceeding the national average of 15.12.
One important measure of a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. The most recent annualized quarterly return on equity for Alerus Financial, National Association was 8.30 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $19.0 million on total equity of $234.6 million. The bank had an annualized return on average assets, or ROA, of 0.93 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.