A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, likely making the bank better able to withstand financial trouble. Obviously, banks that are losing money are less able to do those things.
Grand River Bank received below-average marks on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. Grand River Bank's most recent annualized quarterly return on equity was 3.37 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $789,000 on total equity of $25.8 million. The bank reported an annualized return on average assets, or ROA, of 0.37 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.