A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, are less able to do those things.
On Bankrate's earnings test, Merchants Commercial Bank scored 20 out of a possible 30, better than the national average of 16.52.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one widely used measure of a bank's earnings. Merchants Commercial Bank's most recent annualized quarterly return on equity was 12.26 percent, above the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank earned net income of $824,000 on total equity of $14.0 million. The bank reported an annualized return on average assets, or ROA, of 0.86 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.