How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, increasing its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.
Farmers and Merchants Bank of South Carolina scored 6 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 15.12.
One key way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. Farmers and Merchants Bank of South Carolina's most recent annualized quarterly return on equity was 2.91 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $1.2 million on total equity of $42.1 million. The bank had an annualized return on average assets, or ROA, of 0.37 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.