A bank's profitability has an effect on its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, lessen a bank's ability to do those things.
On Bankrate's test of earnings, Bandera Bank scored 18 out of a possible 30, exceeding the national average of 16.52.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. Bandera Bank's most recent annualized quarterly return on equity was 9.95 percent, above the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank earned net income of $325,000 on total equity of $6.6 million. The bank had an annualized return on average assets, or ROA, of 1.06 percent, above the 1 percent deemed satisfactory in accordance with industry standards, but below the average for U.S. banks of 1.14 percent.