A bank's ability to earn money affects its long-term survivability. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, likely making the bank better prepared to withstand economic shocks. Conversely, losses reduce a bank's ability to do those things.
On Bankrate's earnings test, Texas Champion Bank scored 10 out of a possible 30, 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. The most recent annualized quarterly return on equity for Texas Champion Bank was 4.33 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $1.6 million on total equity of $36.7 million. The bank reported an annualized return on average assets, or ROA, of 0.47 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.