A bank's ability to earn money affects its safety and soundness. Earnings may be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial shocks. Conversely, losses diminish a bank's ability to do those things.
The Riley State Bank of Riley, Kansas exceeded the national average on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The Riley State Bank of Riley, Kansas's most recent annualized quarterly return on equity was 10.40 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $917,000 on total equity of $9.0 million. The bank reported an annualized return on average assets, or ROA, of 1.05 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.