How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, likely making the bank better able to withstand economic shocks. Losses, on the other hand, lessen a bank's ability to do those things.
Norstates Bank underperformed the average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important measure of a bank's earnings. Norstates Bank's most recent annualized quarterly return on equity was -8.53 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $-5.6 million on total equity of $61.6 million. The bank reported an annualized return on average assets, or ROA, of -1.14 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.