A bank's earnings performance has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital buffer, or be used to address problematic loans, potentially making the bank better able to withstand economic shocks. Banks that are losing money, however, are less able to do those things.
American Bank of Baxter Springs did below-average on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.
One important way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The most recent annualized quarterly return on equity for American Bank of Baxter Springs was 2.82 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $302,000 on total equity of $10.7 million. The bank reported an annualized return on average assets, or ROA, of 0.31 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.