How profitable a bank is affects its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or use them to address problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, reduce a bank's ability to do those things.
The Fairmount State Bank scored 6 out of a possible 30 on Bankrate's earnings test, lower than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for The Fairmount State Bank was 2.57 percent, below the national average of 8.10 percent.
The bank recorded net income of $154,000 on total equity of $6.0 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.35 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.