A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, potentially making the bank better able to withstand financial trouble. Conversely, losses take away from a bank's ability to do those things.
On Bankrate's test of earnings, First Northern Bank of Dixon scored 18 out of a possible 30, exceeding the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for First Northern Bank of Dixon was 9.40 percent, above the national average of 8.10 percent.
The bank reported net income of $8.9 million on total equity of $97.2 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.75 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.