How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, likely making the bank better able to withstand financial trouble. Losses, on the other hand, reduce a bank's ability to do those things.
Root River State Bank underperformed the average on Bankrate's earnings test, achieving a score of 10 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important measure of a bank's earnings. Root River State Bank's most recent annualized quarterly return on equity was 4.68 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $381,000 on total equity of $8.3 million. The bank had an annualized return on average assets, or ROA, of 0.55 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.