A bank's profitability affects its long-term survivability. Earnings may be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Obviously, banks that are losing money have less ability to do those things.
Farmers and Merchants Bank of Kendall beat the national average on Bankrate's earnings test, achieving a score of 26 out of a possible 30.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. The most recent annualized quarterly return on equity for Farmers and Merchants Bank of Kendall was 16.07 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $1.7 million on total equity of $10.4 million. The bank reported an annualized return on average assets, or ROA, of 2.25 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.