How profitable a bank is affects its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to address problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, reduce a bank's ability to do those things.
On Bankrate's earnings test, Farmers and Mechanics Federal Savings Bank scored 4 out of a possible 30, below the national average of 15.12.
One key way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. Farmers and Mechanics Federal Savings Bank's most recent annualized quarterly return on equity was 1.71 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $214,000 on total equity of $12.5 million. The bank reported an annualized return on average assets, or ROA, of 0.28 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.