A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand economic trouble. However, banks that are losing money are less able to do those things.
Farmers and Merchants Trust Company of Chambersburg fell short of the national average on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Farmers and Merchants Trust Company of Chambersburg was 2.47 percent, below the national average of 8.10 percent.
The bank earned net income of $2.9 million on total equity of $114.3 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.26 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.