How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, increasing its capital buffer, or use them to address problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, diminish a bank's ability to do those things.
On Bankrate's test of earnings, American Exchange Bank scored 22 out of a possible 30, beating out the national average of 16.52.
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. American Exchange Bank's most recent annualized quarterly return on equity was 12.25 percent, above the national average of 9.28 percent.
The bank reported net income of $451,000 on total equity of $7.4 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 1.52 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.