How profitable a bank is affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Conversely, losses take away from a bank's ability to do those things.
The Bank of River Oaks scored 12 out of a possible 30 on Bankrate's earnings test, less than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important measure of a bank's earnings. The most recent annualized quarterly return on equity for The Bank of River Oaks was 5.50 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $2.6 million on total equity of $46.2 million. The bank reported an annualized return on average assets, or ROA, of 0.58 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.