A bank's earnings performance has an effect on 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 better able to withstand economic trouble. Conversely, losses take away from a bank's ability to do those things.
ValueBank Texas received above-average marks on Bankrate's earnings test, achieving a score of 16 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. ValueBank Texas's most recent annualized quarterly return on equity was 8.03 percent, below the national average of 8.10 percent.
The bank earned net income of $1.8 million on total equity of $23.0 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.80 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.