A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the bank better prepared to withstand economic shocks. Obviously, banks that are losing money have less ability to do those things.
Lamar National Bank did above-average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. Lamar National Bank's most recent annualized quarterly return on equity was 10.06 percent, above the national average of 8.10 percent.
The bank reported net income of $1.6 million on total equity of $16.4 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.12 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.