A bank's profitability has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank better able to withstand economic trouble. Banks that are losing money, however, have less ability to do those things.
River Town Bank fell short of the national average on Bankrate's earnings test, achieving a score of 2 out of a possible 30.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The most recent annualized quarterly return on equity for River Town Bank was 0.63 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $106,000 on total equity of $16.7 million. The bank had an annualized return on average assets, or ROA, of 0.08 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.