How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, reduce a bank's ability to do those things.
On Bankrate's earnings test, Blue Ridge Bank scored 12 out of a possible 30, failing to reach the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Blue Ridge Bank was 6.08 percent, below the national average of 8.10 percent.
The bank earned net income of $712,000 on total equity of $12.1 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.59 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.