A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to address problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money are less able to do those things.
On Bankrate's earnings test, Northern State Bank of Virginia scored 18 out of a possible 30, beating the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one widely used measure of a bank's earnings. Northern State Bank of Virginia's most recent annualized quarterly return on equity was 10.36 percent, above the national average of 8.10 percent.
The bank reported net income of $512,000 on total equity of $5.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.80 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.