How profitable a bank is affects its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, potentially making the bank better able to withstand economic shocks. Losses, on the other hand, diminish a bank's ability to do those things.
On Bankrate's earnings test, Farmers State Bank of Danforth scored 16 out of a possible 30, exceeding the national average of 15.12.
One key way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. The most recent annualized quarterly return on equity for Farmers State Bank of Danforth was 7.85 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $563,000 on total equity of $7.2 million. The bank experienced an annualized return on average assets, or ROA, of 0.91 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.