How profitable a bank is has an effect on its long-term survivability. Earnings can be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Obviously, banks that are losing money are less able to do those things.
Farmers and Merchants Bank scored 16 out of a possible 30 on Bankrate's test of earnings, above the national average of 15.12.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. Farmers and Merchants Bank's most recent annualized quarterly return on equity was 7.87 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $533,000 on total equity of $6.8 million. The bank had an annualized return on average assets, or ROA, of 1.02 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.