How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in tough times. Conversely, losses lessen a bank's ability to do those things.
McFarland State Bank scored 28 out of a possible 30 on Bankrate's earnings test, above the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important measure of a bank's earnings. The most recent annualized quarterly return on equity for McFarland State Bank was 20.98 percent, above the national average of 8.10 percent.
The bank earned net income of $10.2 million on total equity of $51.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 2.22 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.