A bank's earnings performance has an effect on its long-term survivability. Earnings may be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money have less ability to do those things.
On Bankrate's earnings test, Lone Star State Bank of West Texas scored 18 out of a possible 30, above the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. The most recent annualized quarterly return on equity for Lone Star State Bank of West Texas was 10.33 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $10.2 million on total equity of $102.8 million. The bank had an annualized return on average assets, or ROA, of 1.18 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.