How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand economic shocks. However, banks that are losing money are less able to do those things.
On Bankrate's test of earnings, The Farmers State Bank of Aliceville, Kansas scored 16 out of a possible 30, exceeding the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. The Farmers State Bank of Aliceville, Kansas's most recent annualized quarterly return on equity was 8.19 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $1.6 million on total equity of $20.0 million. The bank experienced an annualized return on average assets, or ROA, of 1.08 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.