A bank's ability to earn money has an effect on its long-term survivability. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Banks that are losing money, however, are less able to do those things.
On Bankrate's test of earnings, First Farmers & Merchants Bank scored 22 out of a possible 30, better than the national average of 15.12.
One important way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. First Farmers & Merchants Bank's most recent annualized quarterly return on equity was 12.68 percent, above the national average of 8.10 percent.
The bank earned net income of $5.0 million on total equity of $40.3 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.72 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.