How profitable a bank is has an effect on its long-term survivability. 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 shocks. Obviously, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, Northern Michigan Bank & Trust scored 14 out of a possible 30, falling short of the national average of 16.52.
One widely used measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. Northern Michigan Bank & Trust's most recent annualized quarterly return on equity was 6.97 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank recorded net income of $1.2 million on total equity of $35.0 million. The bank had an annualized return on average assets, or ROA, of 0.94 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.