A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the bank more resilient in tough times. Conversely, losses take away from a bank's ability to do those things.
On Bankrate's test of earnings, Exchange Bank scored 26 out of a possible 30, better than the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one widely used measure of a bank's earnings. Exchange Bank's most recent annualized quarterly return on equity was 17.57 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $15.0 million on total equity of $88.6 million. The bank had an annualized return on average assets, or ROA, of 1.79 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.