A bank's profitability affects its safety and soundness. Earnings can be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand economic trouble. Banks that are losing money, however, are less able to do those things.
On Bankrate's earnings test, State Bank Northwest scored 20 out of a possible 30, better than the national average of 15.12.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. State Bank Northwest's most recent annualized quarterly return on equity was 11.09 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $1.6 million on total equity of $15.0 million. The bank reported an annualized return on average assets, or ROA, of 1.20 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.