A bank's profitability affects its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand economic trouble. Conversely, losses lessen a bank's ability to do those things.
On Bankrate's test of earnings, Valley Bank of Ronan scored 16 out of a possible 30, above the national average of 15.12.
One key measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. The most recent annualized quarterly return on equity for Valley Bank of Ronan was 7.55 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $751,000 on total equity of $10.2 million. The bank experienced an annualized return on average assets, or ROA, of 0.76 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.