How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses take away from a bank's ability to do those things.
Farmers Bank fell short of the national average on Bankrate's earnings test, achieving a score of 10 out of a possible 30.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for Farmers Bank was 4.79 percent, below the national average of 8.10 percent.
The bank recorded net income of $223,000 on total equity of $4.7 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.61 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.