How profitable a bank is affects its long-term survivability. A bank can retain its earnings, increasing its capital buffer, or use them to address problematic loans, likely making the bank better able to withstand economic shocks. Losses, on the other hand, lessen a bank's ability to do those things.
Valley Bank of Kalispell underperformed the average on Bankrate's test of earnings, achieving a score of 14 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. Valley Bank of Kalispell's most recent annualized quarterly return on equity was 6.61 percent, below the national average of 8.10 percent.
The bank reported net income of $874,000 on total equity of $12.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.74 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.