A bank's ability to earn money has an effect on 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 more resilient in tough times. Obviously, banks that are losing money are less able to do those things.
On Bankrate's earnings test, Bank of the West scored 8 out of a possible 30, lower than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. Bank of the West's most recent annualized quarterly return on equity was 3.59 percent, below the national average of 8.10 percent.
The bank earned net income of $437.6 million on total equity of $12.15 billion for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.50 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.