How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, diminish a bank's ability to do those things.
On Bankrate's test of earnings, Bank Northwest scored 30 out of a possible 30, beating out the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Bank Northwest was 24.20 percent, above the national average of 8.10 percent.
The bank reported net income of $2.6 million on total equity of $11.7 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 2.04 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.