S&P Global Market Intelligence has released its annual rankings of 2016’s best-performing banks in three categories: community banks with assets between $1 billion and $10 billion, community banks with assets less than $1 billion, and top-performing credit unions.
Doraville, Ga.-based Metro City Bank earned the top place among the best-performing community banks with assets between $1 billion and $10 billion. Metro City's total loans increased by almost 70% during 2016, hitting $967.3 million at year-end 2016. The bank was highly profitable as well, posting a 37.07% return before tax on average tangible common equity and a 4.86% taxable-equivalent net interest margin for the year. Metro City operates 13 branches across six states.
In the category of best-performing community banks with assets under $1 billion, Shallowater, Texas-based First State Bank took the No. 1 spot after reporting improved loan growth at 41.5% in 2016 and posting a hefty net interest margin of 5.32%. The bank also stood out in efficiency, while keeping credit quality exceptionally strong. First State Bank was originally chartered in 1960 and operates two branches outside of Lubbock, Texas. The bank has nearly doubled in size since 2012.
S&P Global Market Intelligence ranked the best-performing community banks using six core financial performance metrics that focus on profitability, asset quality and growth for the 12-month period ended December 31, 2016.
Community banks were defined as institutions with up to $10 billion in assets. In order for a bank to be eligible for the rankings, at least one-third of its balance sheet must be composed of loans, less than half of which could be attributable to credit card lending. Eligible banks had to be well-capitalized according to regulatory standards and could not have a majority of revenue derived from nontraditional banking activities.
Idaho Central was named the top-performing credit union for the fifth year in a row as it continued to demonstrate some of the highest growth rates in member shares & nonmember deposits at 27.1% in 2016, along with overall member growth at 17.4%. Idaho Central's operating expenses as a percentage of operating revenue dropped 3.95 percentage points year-over-year to 57.50%, better than the top 50 median of 62.99%. Established in 1940, Idaho Central operates 30 branches.
S&P Global Market Intelligence ranked the nation's credit unions using five core financial performance metrics: member growth, market growth, operating expense as a percentage of operating revenue, net charge-offs as a percentage of average loans and delinquent loans as a percentage of total loans. To be eligible for the ranking, a credit union had to report more than $500 million in total assets and a net worth ratio of at least 7.0% as of December 31, 2016.