A bank's ability to earn money has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Obviously, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, Luana Savings Bank scored 30 out of a possible 30, better than the national average of 16.52.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Luana Savings Bank was 24.19 percent, above the national average of 9.28 percent.
The bank recorded net income of $9.8 million on total equity of $85.5 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 2.14 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.