A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or use them to deal with problematic loans, likely making the bank better able to withstand economic shocks. Conversely, losses reduce a bank's ability to do those things.
Lake Shore Savings Bank fell short of the national average on Bankrate's earnings test, achieving a score of 10 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one key measure of a bank's earnings. Lake Shore Savings Bank's most recent annualized quarterly return on equity was 4.77 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $3.5 million on total equity of $74.7 million. The bank experienced an annualized return on average assets, or ROA, of 0.69 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.