A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, likely making the bank better prepared to withstand economic shocks. Losses, on the other hand, lessen a bank's ability to do those things.
On Bankrate's test of earnings, The Richwood Banking Company scored 18 out of a possible 30, exceeding the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. The Richwood Banking Company's most recent annualized quarterly return on equity was 8.85 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $4.2 million on total equity of $46.4 million. The bank had an annualized return on average assets, or ROA, of 0.84 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.