How profitable a bank is has an effect on its long-term survivability. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Obviously, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, First Farmers and Merchants Bank scored 18 out of a possible 30, better than the national average of 15.12.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. First Farmers and Merchants Bank's most recent annualized quarterly return on equity was 9.01 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $10.6 million on total equity of $124.8 million. The bank experienced an annualized return on average assets, or ROA, of 0.78 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.