How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, likely making the bank better able to withstand economic trouble. Banks that are losing money, however, are less able to do those things.
Farmers & Merchants Bank scored 20 out of a possible 30 on Bankrate's earnings test, beating the national average of 16.52.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. Farmers & Merchants Bank's most recent annualized quarterly return on equity was 10.52 percent, above the national average of 9.28 percent.
The bank recorded net income of $4.6 million on total equity of $88.1 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.24 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.