A bank's ability to earn money has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial shocks. Conversely, losses lessen a bank's ability to do those things.
On Bankrate's earnings test, State Bank of Bellingham scored 30 out of a possible 30, better than the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. State Bank of Bellingham's most recent annualized quarterly return on equity was 23.33 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $1.2 million on total equity of $5.6 million. The bank reported an annualized return on average assets, or ROA, of 2.45 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.