A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, lessen a bank's ability to do those things.
Mountain Valley Bank scored 12 out of a possible 30 on Bankrate's test of earnings, below the national average of 15.12.
One key measure of a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. Mountain Valley Bank's most recent annualized quarterly return on equity was 5.40 percent, below the national average of 8.10 percent.
The bank reported net income of $1.0 million on total equity of $19.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.57 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.