A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, potentially making the bank better able to withstand financial shocks. Losses, on the other hand, lessen a bank's ability to do those things.
On Bankrate's earnings test, Red River Bank scored 18 out of a possible 30, better than the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. Red River Bank's most recent annualized quarterly return on equity was 8.56 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $14.2 million on total equity of $171.6 million. The bank had an annualized return on average assets, or ROA, of 0.83 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.