A bank's ability to earn money has an effect on its long-term survivability. Earnings can be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.
Fredonia Valley Bank scored 16 out of a possible 30 on Bankrate's earnings test, above the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Fredonia Valley Bank was 7.34 percent, below the national average of 8.10 percent.
The bank reported net income of $885,000 on total equity of $12.4 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.12 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.