A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to deal with problematic loans, potentially making the bank better prepared to withstand economic trouble. Obviously, banks that are losing money have less ability to do those things.
Needham Bank scored 8 out of a possible 30 on Bankrate's test of earnings, coming in below the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Needham Bank was 3.58 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $9.2 million on total equity of $261.0 million. The bank experienced an annualized return on average assets, or ROA, of 0.46 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.