A bank's earnings performance has an effect on its long-term survivability. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial shocks. Losses, on the other hand, diminish a bank's ability to do those things.
On Bankrate's test of earnings, Northeast Bank scored 20 out of a possible 30, beating the national average of 16.52.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Northeast Bank was 11.76 percent, above the national average of 9.28 percent.
The bank reported net income of $7.9 million on total equity of $137.6 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 1.51 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.