A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to address problematic loans, potentially making the bank better able to withstand economic trouble. Losses, on the other hand, lessen a bank's ability to do those things.
Dakota Western Bank exceeded the national average on Bankrate's earnings test, achieving a score of 26 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Dakota Western Bank was 17.97 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $5.4 million on total equity of $30.3 million. The bank had an annualized return on average assets, or ROA, of 2.14 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.