A bank's profitability affects its safety and soundness. Earnings may be retained by the bank, giving a boost to 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.
Justin State Bank scored 18 out of a possible 30 on Bankrate's earnings test, exceeding the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important measure of a bank's earnings. Justin State Bank's most recent annualized quarterly return on equity was 8.45 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $810,000 on total equity of $8.5 million. The bank experienced an annualized return on average assets, or ROA, of 1.15 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.