How profitable a bank is affects its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses reduce a bank's ability to do those things.
Northpointe Bank scored 26 out of a possible 30 on Bankrate's test of earnings, beating out the national average of 16.52.
One widely used measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. Northpointe Bank's most recent annualized quarterly return on equity was 17.26 percent, above the national average of 9.28 percent.
The bank recorded net income of $5.2 million on total equity of $63.0 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.67 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.