A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, lessen a bank's ability to do those things.
Farmers State Bank scored 24 out of a possible 30 on Bankrate's test of earnings, above 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, essentially) by the total amount of equity. Farmers State Bank's most recent annualized quarterly return on equity was 16.94 percent, above the national average of 8.10 percent.
The bank reported net income of $12.2 million on total equity of $77.6 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.37 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.