A bank's profitability has an effect on its long-term survivability. Earnings can be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in tough times. Conversely, losses lessen a bank's ability to do those things.
On Bankrate's test of earnings, Farmers State Bank scored 18 out of a possible 30, beating out the national average of 15.12.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for Farmers State Bank was 9.05 percent, above the national average of 8.10 percent.
The bank earned net income of $313,000 on total equity of $3.5 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.82 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.