A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to address problematic loans, potentially making the bank better able to withstand financial trouble. Conversely, losses reduce a bank's ability to do those things.
On Bankrate's earnings test, Boundary Waters Bank scored 2 out of a possible 30, below the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. Boundary Waters Bank's most recent annualized quarterly return on equity was 0.88 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $104,000 on total equity of $11.8 million. The bank had an annualized return on average assets, or ROA, of 0.09 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.