A bank's ability to earn money has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.
Premier Valley Bank scored 12 out of a possible 30 on Bankrate's test of earnings, coming in below the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one key measure of a bank's earnings. Premier Valley Bank's most recent annualized quarterly return on equity was 6.34 percent, below the national average of 8.10 percent.
The bank recorded net income of $8.3 million on total equity of $138.4 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.00 percent, right at the level deemed satisfactory in accordance with industry standards, and equal to the average for U.S. banks of 1.00 percent.