How profitable a bank is affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, are less able to do those things.
On Bankrate's test of earnings, Texas Star Bank scored 20 out of a possible 30, exceeding the national average of 15.12.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Texas Star Bank's most recent annualized quarterly return on equity was 11.57 percent, above the national average of 8.10 percent.
The bank reported net income of $4.6 million on total equity of $41.3 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.23 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.