A bank's earnings performance has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank better prepared to withstand financial shocks. Losses, on the other hand, take away from a bank's ability to do those things.
Commercial Bank scored 2 out of a possible 30 on Bankrate's test of earnings, less than the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. Commercial Bank's most recent annualized quarterly return on equity was 0.55 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $84,000 on total equity of $15.2 million. The bank had an annualized return on average assets, or ROA, of 0.04 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.