A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand financial trouble. However, banks that are losing money have less ability to do those things.
On Bankrate's earnings test, Bank of Bozeman scored 12 out of a possible 30, less than the national average of 15.12.
One key way to measure 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 Bank of Bozeman was 5.26 percent, below the national average of 8.10 percent.
The bank reported net income of $365,000 on total equity of $7.1 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.53 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.