A bank's profitability has an effect on its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. Losses, on the other hand, diminish a bank's ability to do those things.
Cedar Valley Bank & Trust scored 22 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 15.12.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Cedar Valley Bank & Trust's most recent annualized quarterly return on equity was 13.59 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $699,000 on total equity of $5.3 million. The bank had an annualized return on average assets, or ROA, of 1.14 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.