A bank's earnings performance has an effect on its long-term survivability. Earnings may be retained by the bank, boosting its capital cushion, or be used to address problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, diminish a bank's ability to do those things.
American Business Bank scored 12 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for American Business Bank was 5.65 percent, below the national average of 8.10 percent.
The bank earned net income of $8.3 million on total equity of $152.8 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.46 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.