How profitable a bank is affects its long-term survivability. 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 able to withstand economic trouble. Losses, on the other hand, diminish a bank's ability to do those things.
First Bank of the Lake underperformed the average on Bankrate's test of earnings, achieving a score of 14 out of a possible 30.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for First Bank of the Lake was 7.05 percent, below the national average of 8.10 percent.
The bank reported net income of $489,000 on total equity of $7.1 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.79 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.