How profitable a bank is has an effect on its long-term survivability. 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 economic shocks. Losses, on the other hand, diminish a bank's ability to do those things.
Newport Federal Bank scored 12 out of a possible 30 on Bankrate's test of earnings, failing to reach the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. The most recent annualized quarterly return on equity for Newport Federal Bank was 6.00 percent, below the national average of 8.10 percent.
The bank reported net income of $1.3 million on total equity of $21.1 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.62 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.