How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. Banks that are losing money, however, have less ability to do those things.
Capon Valley Bank did below-average on Bankrate's earnings test, achieving a score of 8 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one widely used measure of a bank's earnings. Capon Valley Bank's most recent annualized quarterly return on equity was 3.98 percent, below the national average of 8.10 percent.
The bank recorded net income of $674,000 on total equity of $17.0 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.45 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.