How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, boosting its capital cushion, or be used to address problematic loans, likely making the bank more resilient in tough times. Obviously, banks that are losing money have less ability to do those things.
First National Bank of South Padre Island exceeded the national average on Bankrate's earnings test, achieving a score of 20 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one key measure of a bank's earnings. First National Bank of South Padre Island's most recent annualized quarterly return on equity was 10.69 percent, above the national average of 8.10 percent.
The bank reported net income of $683,000 on total equity of $6.6 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.11 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.