How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, expanding its capital buffer, or use them to deal with problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.
Farmers State Bank scored 12 out of a possible 30 on Bankrate's earnings test, less than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. Farmers State Bank's most recent annualized quarterly return on equity was 5.44 percent, below the national average of 8.10 percent.
The bank reported net income of $146,000 on total equity of $2.7 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.54 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.