How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses reduce a bank's ability to do those things.
On Bankrate's earnings test, Farmers State Bank scored 12 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, or net income (profit, basically) divided by the total amount of equity. The most recent annualized quarterly return on equity for Farmers State Bank was 5.10 percent, below the national average of 8.10 percent.
The bank reported net income of $2.1 million on total equity of $40.7 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.56 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.