How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand economic shocks. Losses, on the other hand, diminish a bank's ability to do those things.
Lafayette State Bank received below-average marks on Bankrate's test of earnings, achieving a score of 0 out of a possible 30.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. Lafayette State Bank's most recent annualized quarterly return on equity was -23.22 percent, below the national average of 8.10 percent.
The bank earned net income of $-840,000 on total equity of $3.6 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of -1.07 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.