How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.
The Farmers Bank of Appomattox scored 16 out of a possible 30 on Bankrate's test of earnings, better than the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. The Farmers Bank of Appomattox's most recent annualized quarterly return on equity was 7.95 percent, below the national average of 8.10 percent.
The bank earned net income of $2.4 million on total equity of $30.5 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.99 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.