How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand economic shocks. Conversely, losses take away from a bank's ability to do those things.
Frontier Bank of Texas scored 12 out of a possible 30 on Bankrate's test of earnings, coming in below the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. Frontier Bank of Texas's most recent annualized quarterly return on equity was 6.16 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $1.8 million on total equity of $31.9 million. The bank had an annualized return on average assets, or ROA, of 0.98 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.