A bank's earnings performance has an effect on its long-term survivability. Earnings can be retained by the bank, boosting its capital buffer, or be used to address problematic loans, likely making the bank better prepared to withstand economic trouble. Obviously, banks that are losing money are less able to do those things.
First Texas Bank scored 10 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. First Texas Bank's most recent annualized quarterly return on equity was 4.78 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $721,000 on total equity of $15.2 million. The bank had an annualized return on average assets, or ROA, of 0.55 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.