A bank's ability to earn money affects its long-term survivability. Earnings may be retained by the bank, increasing its capital cushion, or be used to address problematic loans, likely making the bank better able to withstand economic shocks. Conversely, losses take away from a bank's ability to do those things.
Northway Bank scored 16 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important measure of a bank's earnings. Northway Bank's most recent annualized quarterly return on equity was 7.87 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $7.5 million on total equity of $98.3 million. The bank experienced an annualized return on average assets, or ROA, of 0.85 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.