How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital cushion, or use them to address problematic loans, likely making the bank more resilient in times of trouble. Conversely, losses lessen a bank's ability to do those things.
On Bankrate's test of earnings, Farmers State Bank scored 8 out of a possible 30, less than the national average of 15.12.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Farmers State Bank's most recent annualized quarterly return on equity was 3.36 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $123,000 on total equity of $3.7 million. The bank had an annualized return on average assets, or ROA, of 0.36 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.