A bank's profitability has an effect on its long-term survivability. Earnings can 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. Losses, on the other hand, lessen a bank's ability to do those things.
On Bankrate's test of earnings, Bank of Gueydan scored 8 out of a possible 30, below the national average of 15.12.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for Bank of Gueydan was 3.12 percent, below the national average of 8.10 percent.
The bank recorded net income of $488,000 on total equity of $15.5 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.61 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.