A bank's ability to earn money has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, potentially making the bank better prepared to withstand economic shocks. Conversely, losses take away from a bank's ability to do those things.
The Bank of New Glarus scored 18 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. The Bank of New Glarus's most recent annualized quarterly return on equity was 9.72 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $2.9 million on total equity of $30.5 million. The bank had an annualized return on average assets, or ROA, of 1.07 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.