How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, River City Bank scored 10 out of a possible 30, falling short of the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. River City Bank's most recent annualized quarterly return on equity was 4.82 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $770,000 on total equity of $16.1 million. The bank experienced an annualized return on average assets, or ROA, of 0.49 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.