How profitable a bank is affects its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them to address problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.
The Farmers State Bank and Trust Company fell behind the national average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for The Farmers State Bank and Trust Company was -3.57 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $-830,000 on total equity of $22.3 million. The bank reported an annualized return on average assets, or ROA, of -0.40 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.