A bank's profitability has an effect on its long-term survivability. Earnings can be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.
Royal Business Bank scored 20 out of a possible 30 on Bankrate's earnings test, above the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Royal Business Bank was 11.79 percent, above the national average of 8.10 percent.
The bank recorded net income of $27.6 million on total equity of $263.0 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.78 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.