How profitable a bank is affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the bank better prepared to withstand financial trouble. Banks that are losing money, however, are less able to do those things.
Plains Commerce Bank scored 22 out of a possible 30 on Bankrate's test of earnings, beating 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. Plains Commerce Bank's most recent annualized quarterly return on equity was 12.53 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $10.7 million on total equity of $87.5 million. The bank reported an annualized return on average assets, or ROA, of 1.68 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.