A bank's earnings performance has an effect on its safety and soundness. Earnings can be retained by the bank, boosting its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, lessen a bank's ability to do those things.
On Bankrate's earnings test, The First and Farmers Bank scored 4 out of a possible 30, lower than the national average of 15.12.
One important measure of a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. The First and Farmers Bank's most recent annualized quarterly return on equity was 1.76 percent, below the national average of 8.10 percent.
The bank earned net income of $83,000 on total equity of $7.0 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.15 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.