A bank's ability to earn money affects its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to address problematic loans, potentially making the bank better prepared to withstand economic trouble. Obviously, banks that are losing money are less able to do those things.
NorthStar Bank scored 22 out of a possible 30 on Bankrate's test of earnings, beating out the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. NorthStar Bank's most recent annualized quarterly return on equity was 12.80 percent, above the national average of 8.10 percent.
The bank earned net income of $3.0 million on total equity of $24.2 million for the twelve months ended December 31, 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 1.00 percent.