A bank's ability to earn money affects its long-term survivability. Earnings can be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand economic trouble. Conversely, losses reduce a bank's ability to do those things.
Merchants Commercial Bank scored 18 out of a possible 30 on Bankrate's earnings test, better than the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. Merchants Commercial Bank's most recent annualized quarterly return on equity was 8.48 percent, above the national average of 8.10 percent.
The bank reported net income of $1.2 million on total equity of $14.3 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.62 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.