A bank's earnings performance affects its safety and soundness. Earnings may be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand financial shocks. However, banks that are losing money are less able to do those things.
On Bankrate's earnings test, The Farmers State Bank scored 22 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 way to measure a bank's earnings. The most recent annualized quarterly return on equity for The Farmers State Bank was 14.41 percent, above the national average of 8.10 percent.
The bank reported net income of $1.4 million on total equity of $10.3 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.33 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.