A bank's profitability affects its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, potentially making the bank more resilient in tough times. Obviously, banks that are losing money are less able to do those things.
On Bankrate's test of earnings, Farmers and Merchants Union Bank scored 20 out of a possible 30, exceeding the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important measure of a bank's earnings. The most recent annualized quarterly return on equity for Farmers and Merchants Union Bank was 10.41 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $3.9 million on total equity of $38.9 million. The bank had an annualized return on average assets, or ROA, of 1.04 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.