A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, potentially making the bank better able to withstand financial trouble. Losses, on the other hand, diminish a bank's ability to do those things.
On Bankrate's test of earnings, Bank of Farmington scored 12 out of a possible 30, coming in below the national average of 15.12.
One key way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. The most recent annualized quarterly return on equity for Bank of Farmington was 5.16 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $919,000 on total equity of $17.9 million. The bank reported an annualized return on average assets, or ROA, of 0.59 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.