How profitable a bank is has an effect on its long-term survivability. Earnings can be retained by the bank, boosting its capital buffer, or be used to address problematic loans, likely making the bank more resilient in times of trouble. Conversely, losses lessen a bank's ability to do those things.
On Bankrate's test of earnings, Bank of Botetourt scored 14 out of a possible 30, failing to reach the national average of 15.12.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for Bank of Botetourt was 6.62 percent, below the national average of 8.10 percent.
The bank recorded net income of $2.3 million on total equity of $35.0 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.62 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.