A bank's profitability affects its long-term survivability. Earnings can be retained by the bank, boosting its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, take away from a bank's ability to do those things.
Premier Valley Bank fell behind the national average on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.
One key way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. Premier Valley Bank's most recent annualized quarterly return on equity was 6.16 percent, below the national average of 9.28 percent.
The bank reported net income of $3.9 million on total equity of $138.1 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.99 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.