A bank's profitability has an effect on 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 times of trouble. However, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, Valley National Bank scored 16 out of a possible 30, falling short of the national average of 16.52.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for Valley National Bank was 7.62 percent, below the national average of 9.28 percent.
The bank recorded net income of $95.9 million on total equity of $2.54 billion for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 0.83 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.