A bank's ability to earn money has an effect on its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial shocks. Obviously, banks that are losing money have less ability to do those things.
On Bankrate's earnings test, Farmers National Bank of Griggsville scored 24 out of a possible 30, beating out the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one key measure of a bank's earnings. Farmers National Bank of Griggsville's most recent annualized quarterly return on equity was 16.31 percent, above the national average of 8.10 percent.
The bank recorded net income of $1.4 million on total equity of $8.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.57 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.