How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or use them to address problematic loans, potentially making the bank better able to withstand economic shocks. However, banks that are losing money have less ability to do those things.
On Bankrate's earnings test, River Valley Bank scored 24 out of a possible 30, beating out the national average of 16.06.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for River Valley Bank was 15.57 percent, above the national average of 8.10 percent.
The bank recorded net income of $17.7 million on total equity of $116.6 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.47 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.