How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.
Independent Farmers Bank exceeded the national average on Bankrate's earnings test, achieving a score of 24 out of a possible 30.
One widely used measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. Independent Farmers Bank's most recent annualized quarterly return on equity was 14.15 percent, above the national average of 8.10 percent.
The bank earned net income of $1.5 million on total equity of $10.7 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.31 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.