A bank's ability to earn money affects its safety and soundness. Earnings may be retained by the bank, boosting its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.
Bofi Federal Bank scored 26 out of a possible 30 on Bankrate's earnings test, beating out the national average of 16.06.
One important way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. Bofi Federal Bank's most recent annualized quarterly return on equity was 18.80 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $150.8 million on total equity of $872.6 million. The bank experienced an annualized return on average assets, or ROA, of 1.76 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.