A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, diminish a bank's ability to do those things.
On Bankrate's earnings test, First & Farmers National Bank, Inc. scored 18 out of a possible 30, above the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. First & Farmers National Bank, Inc.'s most recent annualized quarterly return on equity was 9.56 percent, above the national average of 8.10 percent.
The bank recorded net income of $6.4 million on total equity of $67.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.25 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.