A bank's earnings performance affects its safety and soundness. Earnings can be retained by the bank, expanding its capital buffer, or be used to address problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.
FinWise Bank scored 28 out of a possible 30 on Bankrate's test of earnings, beating out the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for FinWise Bank was 25.20 percent, above the national average of 8.10 percent.
The bank reported net income of $2.2 million on total equity of $11.0 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 3.80 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.