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. Banks that are losing money, however, are less able to do those things.
NXT Bank fell behind the national average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. NXT Bank's most recent annualized quarterly return on equity was 4.92 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $1.4 million on total equity of $28.9 million. The bank reported an annualized return on average assets, or ROA, of 0.53 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.