A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, potentially making the bank better able to withstand financial trouble. Conversely, losses lessen a bank's ability to do those things.
On Bankrate's earnings test, Farmers State Bank scored 20 out of a possible 30, better than the national average of 15.12.
One key measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The most recent annualized quarterly return on equity for Farmers State Bank was 10.37 percent, above the national average of 8.10 percent.
The bank reported net income of $10.6 million on total equity of $104.0 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.43 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.