A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.
River Valley Bank scored 24 out of a possible 30 on Bankrate's test of earnings, above the national average of 15.12.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. River Valley Bank's most recent annualized quarterly return on equity was 15.57 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $17.7 million on total equity of $116.6 million. 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.