A bank's profitability has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. However, banks that are losing money have less ability to do those things.
Merchants Bank of Bangor scored 16 out of a possible 30 on Bankrate's earnings test, beating the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important measure of a bank's earnings. Merchants Bank of Bangor's most recent annualized quarterly return on equity was 7.94 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $2.4 million on total equity of $31.2 million. The bank had an annualized return on average assets, or ROA, of 0.63 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.