A bank's ability to earn money affects its safety and soundness. Earnings may be retained by the bank, increasing its capital cushion, or be used to address problematic loans, likely making the bank more resilient in tough times. Conversely, losses diminish a bank's ability to do those things.
Charles Schwab Bank received above-average marks on Bankrate's earnings test, achieving a score of 24 out of a possible 30.
One widely used measure of 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 Charles Schwab Bank was 15.50 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $1.95 billion on total equity of $13.22 billion. The bank experienced an annualized return on average assets, or ROA, of 1.06 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.