How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to address problematic loans, likely making the bank better prepared to withstand financial shocks. However, banks that are losing money have less ability to do those things.
Forward Financial Bank fell short of the national average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. Forward Financial Bank's most recent annualized quarterly return on equity was 4.76 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $2.2 million on total equity of $50.6 million. The bank had an annualized return on average assets, or ROA, of 0.53 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.