A bank's profitability affects its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank better able to withstand economic shocks. However, banks that are losing money are less able to do those things.
On Bankrate's earnings test, Red River State Bank scored 20 out of a possible 30, exceeding the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for Red River State Bank was 10.73 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $904,000 on total equity of $8.4 million. The bank experienced an annualized return on average assets, or ROA, of 1.13 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.