How profitable a bank is affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.
The Lake Bank received below-average marks on Bankrate's earnings test, achieving a score of 14 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. The Lake Bank's most recent annualized quarterly return on equity was 6.93 percent, below the national average of 8.10 percent.
The bank recorded net income of $787,000 on total equity of $11.5 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.60 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.