How profitable a bank is has an effect on its long-term survivability. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.
On Bankrate's test of earnings, The Northern State Bank of Gonvick scored 10 out of a possible 30, lower than the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The Northern State Bank of Gonvick's most recent annualized quarterly return on equity was 4.87 percent, below the national average of 8.10 percent.
The bank earned net income of $315,000 on total equity of $6.6 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.75 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.