A bank's earnings performance has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, diminish a bank's ability to do those things.
On Bankrate's test of earnings, Wells Fargo Financial National Bank scored 30 out of a possible 30, beating the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. Wells Fargo Financial National Bank's most recent annualized quarterly return on equity was 35.68 percent, above the national average of 8.10 percent.
The bank recorded net income of $413.5 million on total equity of $1.07 billion for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 4.61 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.