A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the bank better able to withstand economic shocks. Banks that are losing money, however, have less ability to do those things.
Farmers & Merchants Bank of Central California beat the national average on Bankrate's test of earnings, achieving a score of 18 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for Farmers & Merchants Bank of Central California was 9.80 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $29.1 million on total equity of $297.6 million. The bank experienced an annualized return on average assets, or ROA, of 0.97 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.