A bank's earnings performance has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.
Pearland State Bank exceeded the national average on Bankrate's test of earnings, achieving a score of 22 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. Pearland State Bank's most recent annualized quarterly return on equity was 12.32 percent, above the national average of 8.10 percent.
The bank recorded net income of $2.6 million on total equity of $21.1 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.39 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.