A bank's ability to earn money has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.
American Bank of Commerce fell short of the national average on Bankrate's test of earnings, achieving a score of 14 out of a possible 30.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. The most recent annualized quarterly return on equity for American Bank of Commerce was 7.09 percent, below the national average of 9.28 percent.
The bank reported net income of $402,000 on total equity of $11.6 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 0.91 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.