A bank's earnings performance affects its long-term survivability. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses lessen a bank's ability to do those things.
The Exchange Bank exceeded the national average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for The Exchange Bank was 8.23 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $866,000 on total equity of $10.8 million. The bank had an annualized return on average assets, or ROA, of 0.90 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.