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, potentially making the bank better prepared to withstand financial trouble. Obviously, banks that are losing money have less ability to do those things.
Exchange State Bank did above-average on Bankrate's test of earnings, achieving a score of 18 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one widely used measure of a bank's earnings. Exchange State Bank's most recent annualized quarterly return on equity was 8.33 percent, above the national average of 8.10 percent.
The bank earned net income of $906,000 on total equity of $11.1 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.94 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.