A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, boosting its capital cushion, or be used to address problematic loans, likely making the bank better prepared to withstand financial trouble. Conversely, losses diminish a bank's ability to do those things.
Western Bank outperformed the average on Bankrate's test of earnings, achieving a score of 22 out of a possible 30.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. The most recent annualized quarterly return on equity for Western Bank was 12.53 percent, above the national average of 8.10 percent.
The bank earned net income of $2.7 million on total equity of $21.0 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.57 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.