A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.
Bank of Rio Vista scored 12 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 16.52.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. The most recent annualized quarterly return on equity for Bank of Rio Vista was 5.20 percent, below the national average of 9.28 percent.
The bank reported net income of $693,000 on total equity of $27.6 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.63 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.