A bank's profitability affects its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to address problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, are less able to do those things.
Bank of Montana outperformed the average on Bankrate's earnings test, achieving a score of 30 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. Bank of Montana's most recent annualized quarterly return on equity was 46.65 percent, above the national average of 8.10 percent.
The bank reported net income of $3.6 million on total equity of $8.3 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 4.67 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.