How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, expanding its capital cushion, or be used to address problematic loans, likely making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.
The Lauderdale County Bank received below-average marks on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for The Lauderdale County Bank was 5.53 percent, below the national average of 8.10 percent.
The bank earned net income of $283,000 on total equity of $5.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.56 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.