A bank's ability to earn money affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank better prepared to withstand economic trouble. Banks that are losing money, however, have less ability to do those things.
The Farmers and Merchants National Bank of Fairview received above-average marks on Bankrate's test of earnings, achieving a score of 24 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. The Farmers and Merchants National Bank of Fairview's most recent annualized quarterly return on equity was 13.69 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $1.8 million on total equity of $12.7 million. The bank had an annualized return on average assets, or ROA, of 1.63 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.