How profitable a bank is affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or use them to address 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.
On Bankrate's earnings test, First Farmers & Merchants State Bank scored 18 out of a possible 30, exceeding the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one key measure of a bank's earnings. First Farmers & Merchants State Bank's most recent annualized quarterly return on equity was 8.52 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $1.1 million on total equity of $12.8 million. The bank reported an annualized return on average assets, or ROA, of 1.34 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.