How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, take away from a bank's ability to do those things.
Farmers & Merchants Bank exceeded the national average on Bankrate's earnings test, achieving a score of 18 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. Farmers & Merchants Bank's most recent annualized quarterly return on equity was 10.26 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $1.4 million on total equity of $14.0 million. The bank had an annualized return on average assets, or ROA, of 1.01 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.