How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand economic shocks. Banks that are losing money, however, are less able to do those things.
American Metro Bank scored 10 out of a possible 30 on Bankrate's test of earnings, failing to reach the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. American Metro Bank's most recent annualized quarterly return on equity was 4.47 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $343,000 on total equity of $8.1 million. The bank experienced an annualized return on average assets, or ROA, of 0.53 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.