How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, potentially making the bank better able to withstand financial shocks. Conversely, losses diminish a bank's ability to do those things.
The Commercial Bank exceeded the national average on Bankrate's test of earnings, achieving a score of 16 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important measure of a bank's earnings. The Commercial Bank's most recent annualized quarterly return on equity was 7.31 percent, below the national average of 8.10 percent.
The bank recorded net income of $1.1 million on total equity of $15.0 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.73 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.