A bank's earnings performance affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. Conversely, losses take away from a bank's ability to do those things.
On Bankrate's test of earnings, The Cowboy Bank of Texas scored 30 out of a possible 30, above 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. The Cowboy Bank of Texas's most recent annualized quarterly return on equity was 22.95 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $1.7 million on total equity of $7.9 million. The bank experienced an annualized return on average assets, or ROA, of 2.14 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.