How profitable a bank is has an effect on its safety and soundness. Earnings may 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 prepared to withstand financial trouble. Banks that are losing money, however, are less able to do those things.
Bank of Louisiana scored 0 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one widely used measure of a bank's earnings. Bank of Louisiana's most recent annualized quarterly return on equity was -15.37 percent, below the national average of 8.10 percent.
The bank earned net income of $-1.3 million on total equity of $7.4 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of -1.64 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.