A bank's ability to earn money has an effect on its safety and soundness. Earnings can be retained by the bank, boosting its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. However, banks that are losing money have less ability to do those things.
On Bankrate's earnings test, Ladysmith Federal Savings and Loan Association scored 10 out of a possible 30, coming in below the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important measure of a bank's earnings. The most recent annualized quarterly return on equity for Ladysmith Federal Savings and Loan Association was 4.74 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $248,000 on total equity of $5.3 million. The bank experienced an annualized return on average assets, or ROA, of 0.50 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.