A bank's earnings performance has an effect on its long-term survivability. Earnings can be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses lessen a bank's ability to do those things.
The Farmers and Merchants National Bank of Nashville scored 18 out of a possible 30 on Bankrate's earnings test, exceeding the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. The Farmers and Merchants National Bank of Nashville's most recent annualized quarterly return on equity was 9.63 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $2.1 million on total equity of $21.9 million. The bank reported an annualized return on average assets, or ROA, of 1.20 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.