A bank's profitability affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, potentially making the bank better able to withstand financial shocks. However, banks that are losing money are less able to do those things.
American Exchange Bank scored 18 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 16.52.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. American Exchange Bank's most recent annualized quarterly return on equity was 9.58 percent, above the national average of 9.28 percent.
The bank reported net income of $239,000 on total equity of $5.1 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 1.04 percent, above the 1 percent deemed satisfactory in accordance with industry standards, but below the average for U.S. banks of 1.14 percent.