How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, likely making the bank better able to withstand economic trouble. Conversely, losses reduce a bank's ability to do those things.
Merchants Bank of California, National Association scored 0 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 15.12.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. Merchants Bank of California, National Association's most recent annualized quarterly return on equity was -176.12 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $-7.8 million on total equity of $985,000. The bank had an annualized return on average assets, or ROA, of -24.07 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.