How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the bank better able to withstand financial shocks. Conversely, losses diminish a bank's ability to do those things.
Farmers & Merchants Bank & Trust fell short of the national average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one widely used measure of a bank's earnings. Farmers & Merchants Bank & Trust's most recent annualized quarterly return on equity was 1.57 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $275,000 on total equity of $17.1 million. The bank experienced an annualized return on average assets, or ROA, of 0.14 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.