How profitable a bank is affects its long-term survivability. A bank can retain its earnings, increasing its capital buffer, or use them to address problematic loans, likely making the bank better prepared to withstand economic trouble. Banks that are losing money, however, are less able to do those things.
On Bankrate's test of earnings, Farmers & Merchants Savings Bank scored 24 out of a possible 30, beating the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. Farmers & Merchants Savings Bank's most recent annualized quarterly return on equity was 14.53 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $8.6 million on total equity of $60.4 million. The bank had an annualized return on average assets, or ROA, of 1.60 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.