How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them 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.
First Madison Valley Bank scored 22 out of a possible 30 on Bankrate's test of earnings, beating out the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one widely used measure of a bank's earnings. First Madison Valley Bank's most recent annualized quarterly return on equity was 13.37 percent, above the national average of 8.10 percent.
The bank recorded net income of $1.8 million on total equity of $13.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.13 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.