A bank's ability to earn money affects its long-term survivability. Earnings may be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, are less able to do those things.
On Bankrate's test of earnings, Farmers and Merchants Trust Company of Chambersburg scored 20 out of a possible 30, exceeding the national average of 16.52.
One important measure of a bank's earnings is return on equity, or net income (essentially profit) divided by total equity. Farmers and Merchants Trust Company of Chambersburg's most recent annualized quarterly return on equity was 11.45 percent, above the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank recorded net income of $6.8 million on total equity of $122.0 million. The bank experienced an annualized return on average assets, or ROA, of 1.20 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.