How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, likely making the bank better able to withstand economic trouble. Losses, on the other hand, reduce a bank's ability to do those things.
Oak Valley Community Bank outperformed the average on Bankrate's earnings test, achieving a score of 20 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one widely used measure of a bank's earnings. Oak Valley Community Bank's most recent annualized quarterly return on equity was 10.65 percent, above the national average of 8.10 percent.
The bank reported net income of $9.2 million on total equity of $90.3 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.92 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.