A bank's earnings performance has an effect on its long-term survivability. Earnings can be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.
LincolnWay Community Bank received above-average marks on Bankrate's test of earnings, achieving a score of 20 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. LincolnWay Community Bank's most recent annualized quarterly return on equity was 11.15 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $2.4 million on total equity of $22.6 million. The bank had an annualized return on average assets, or ROA, of 1.25 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.