How profitable a bank is 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 economic shocks. Losses, on the other hand, reduce a bank's ability to do those things.
American Exchange Bank scored 20 out of a possible 30 on Bankrate's earnings test, beating out the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. American Exchange Bank's most recent annualized quarterly return on equity was 10.23 percent, above the national average of 8.10 percent.
The bank earned net income of $763,000 on total equity of $7.6 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.23 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.