A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, take away from a bank's ability to do those things.
F&M Bank scored 20 out of a possible 30 on Bankrate's test of earnings, better than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one key measure of a bank's earnings. F&M Bank's most recent annualized quarterly return on equity was 10.66 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $1.2 million on total equity of $10.7 million. The bank had an annualized return on average assets, or ROA, of 1.05 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.