How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. Obviously, banks that are losing money are less able to do those things.
Great North Bank underperformed the average on Bankrate's earnings test, achieving a score of 8 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one widely used measure of a bank's earnings. Great North Bank's most recent annualized quarterly return on equity was 3.91 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $450,000 on total equity of $12.2 million. The bank reported an annualized return on average assets, or ROA, of 0.41 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.