A bank's ability to earn money has an effect on its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand financial shocks. Conversely, losses reduce a bank's ability to do those things.
Bank Rhode Island did below-average on Bankrate's earnings test, achieving a score of 10 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one widely used measure of a bank's earnings. Bank Rhode Island's most recent annualized quarterly return on equity was 4.13 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $11.6 million on total equity of $286.1 million. The bank experienced an annualized return on average assets, or ROA, of 0.53 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.