A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the bank better able to withstand financial shocks. Conversely, losses diminish a bank's ability to do those things.
Extraco Banks, National Association scored 18 out of a possible 30 on Bankrate's earnings test, beating the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. Extraco Banks, National Association's most recent annualized quarterly return on equity was 9.01 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $12.5 million on total equity of $140.6 million. The bank had an annualized return on average assets, or ROA, of 0.90 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.