A bank's ability to earn money affects its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, diminish a bank's ability to do those things.
F & M Bank Minnesota did above-average on Bankrate's earnings test, achieving a score of 20 out of a possible 30.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. F & M Bank Minnesota's most recent annualized quarterly return on equity was 10.74 percent, above the national average of 8.10 percent.
The bank earned net income of $1.2 million on total equity of $11.7 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.00 percent, right at the level deemed satisfactory in accordance with industry standards, and equal to the average for U.S. banks of 1.00 percent.