How profitable a bank is has an effect on its long-term survivability. Earnings may be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank better prepared to withstand economic shocks. Obviously, banks that are losing money have less ability to do those things.
Village Bank outperformed the average on Bankrate's test of earnings, achieving a score of 30 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. Village Bank's most recent annualized quarterly return on equity was 20.52 percent, above the national average of 8.10 percent.
The bank reported net income of $4.5 million on total equity of $22.3 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.71 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.