How profitable a bank is affects its long-term survivability. A bank can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, potentially making the bank better able to withstand economic trouble. However, banks that are losing money are less able to do those things.
On Bankrate's test of earnings, Merchants Bank scored 16 out of a possible 30, beating out the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important measure of a bank's earnings. Merchants Bank's most recent annualized quarterly return on equity was 7.28 percent, below the national average of 8.10 percent.
The bank earned net income of $1.7 million on total equity of $24.6 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.82 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.