A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in tough times. Conversely, losses take away from a bank's ability to do those things.
On Bankrate's test of earnings, Mountain Valley Bank scored 4 out of a possible 30, below the national average of 15.12.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. Mountain Valley Bank's most recent annualized quarterly return on equity was 1.84 percent, below the national average of 8.10 percent.
The bank earned net income of $162,000 on total equity of $8.8 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.17 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.