A bank's profitability affects its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, lessen a bank's ability to do those things.
On Bankrate's test of earnings, Kaw Valley Bank scored 6 out of a possible 30, coming in below the national average of 15.12.
One key measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. The most recent annualized quarterly return on equity for Kaw Valley Bank was 1.91 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $692,000 on total equity of $30.6 million. The bank had an annualized return on average assets, or ROA, of 0.20 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.