How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, take away from a bank's ability to do those things.
Northwestern Bank did above-average on Bankrate's earnings test, achieving a score of 26 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. Northwestern Bank's most recent annualized quarterly return on equity was 17.57 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $8.0 million on total equity of $46.6 million. The bank had an annualized return on average assets, or ROA, of 1.89 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.