How profitable a bank is has an effect on its long-term survivability. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial shocks. Losses, on the other hand, lessen a bank's ability to do those things.
Farmers and Merchants Savings Bank scored 6 out of a possible 30 on Bankrate's test of earnings, below the national average of 15.12.
One key measure of a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. Farmers and Merchants Savings Bank's most recent annualized quarterly return on equity was 2.48 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $291,000 on total equity of $11.7 million. The bank experienced an annualized return on average assets, or ROA, of 0.35 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.