How profitable a bank is has an effect on its long-term survivability. Earnings may be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank better able to withstand economic trouble. Losses, on the other hand, lessen a bank's ability to do those things.
On Bankrate's earnings test, Farmers State Bank scored 22 out of a possible 30, beating the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one key measure of a bank's earnings. Farmers State Bank's most recent annualized quarterly return on equity was 13.14 percent, above the national average of 8.10 percent.
The bank earned net income of $1.6 million on total equity of $12.7 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.39 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.