A bank's ability to earn money has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to address problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, are less able to do those things.
Farmers Savings Bank scored 20 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 the total amount of equity, is one widely used measure of a bank's earnings. Farmers Savings Bank's most recent annualized quarterly return on equity was 10.27 percent, above the national average of 8.10 percent.
The bank recorded net income of $683,000 on total equity of $6.8 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.75 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.