How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the bank better able to withstand economic shocks. Conversely, losses diminish a bank's ability to do those things.
Farmers State Bank & Trust Co. exceeded the national average on Bankrate's test of earnings, achieving a score of 22 out of a possible 30.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Farmers State Bank & Trust Co.'s most recent annualized quarterly return on equity was 13.63 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $1.6 million on total equity of $11.8 million. The bank reported an annualized return on average assets, or ROA, of 1.44 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.