A bank's profitability has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, reduce a bank's ability to do those things.
Washita Valley Bank scored 16 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The most recent annualized quarterly return on equity for Washita Valley Bank was 7.07 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $516,000 on total equity of $7.3 million. The bank reported an annualized return on average assets, or ROA, of 1.24 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.