How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, expanding its capital cushion, or be used to deal with 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, Bank of Ann Arbor scored 22 out of a possible 30, beating out the national average of 15.12.
One key measure of a bank's earnings is return on equity, or net income (essentially profit) divided by total equity. The most recent annualized quarterly return on equity for Bank of Ann Arbor was 14.12 percent, above the national average of 8.10 percent.
The bank earned net income of $20.1 million on total equity of $156.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.37 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.