A bank's earnings performance affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses take away from a bank's ability to do those things.
On Bankrate's earnings test, The Farmers State Bank of Oakley, Kansas scored 18 out of a possible 30, exceeding the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important measure of a bank's earnings. The Farmers State Bank of Oakley, Kansas's most recent annualized quarterly return on equity was 9.16 percent, above the national average of 8.10 percent.
The bank earned net income of $1.8 million on total equity of $20.2 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.