A bank's ability to earn money affects its long-term survivability. Earnings may be retained by the bank, expanding its capital buffer, or be used to address problematic loans, potentially making the bank better prepared to withstand economic shocks. Banks that are losing money, however, are less able to do those things.
On Bankrate's earnings test, Rockford Bank and Trust Company scored 14 out of a possible 30, failing to reach the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important measure of a bank's earnings. Rockford Bank and Trust Company's most recent annualized quarterly return on equity was 7.07 percent, below the national average of 8.10 percent.
The bank earned net income of $2.7 million on total equity of $39.5 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.64 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.