A bank's earnings performance affects its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to address problematic loans, likely making the bank better prepared to withstand financial trouble. Banks that are losing money, however, are less able to do those things.
New Buffalo Savings Bank outperformed the average on Bankrate's earnings test, achieving a score of 16 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. New Buffalo Savings Bank's most recent annualized quarterly return on equity was 7.32 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $988,000 on total equity of $14.0 million. The bank had an annualized return on average assets, or ROA, of 0.83 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.