A bank's profitability affects its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money have less ability to do those things.
Valley Bank scored 8 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important measure of a bank's earnings. Valley Bank's most recent annualized quarterly return on equity was 3.72 percent, below the national average of 8.10 percent.
The bank recorded net income of $142,000 on total equity of $3.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.37 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.