A bank's ability to earn money affects its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or use them to address problematic loans, potentially making the bank better prepared to withstand economic trouble. Losses, on the other hand, diminish a bank's ability to do those things.
On Bankrate's earnings test, Farmers State Bank, S/B scored 6 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, calculated by dividing net income (essentially profit) by the total amount of equity. Farmers State Bank, S/B's most recent annualized quarterly return on equity was 2.24 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $236,000 on total equity of $10.7 million. The bank reported an annualized return on average assets, or ROA, of 0.35 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.