How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, likely making the bank better able to withstand financial trouble. Banks that are losing money, however, have less ability to do those things.
Luana Savings Bank scored 30 out of a possible 30 on Bankrate's earnings test, better than the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. The most recent annualized quarterly return on equity for Luana Savings Bank was 22.31 percent, above the national average of 8.10 percent.
The bank reported net income of $18.9 million on total equity of $92.8 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 2.01 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.