S&P Global Market Intelligence Ranks the Best-Performing Community Banks and Credit Unions for 2016
Metro City Bank, First State Bank, and Idaho Central Credit Union crowned as top-performers in the three rankings
S&P Global Market Intelligence, a leader in multi-asset class research data and insight, released its annual rankings of 2016’s 100 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.
Of the best-performing community banks with assets between $1 billion and $10 billion, Doraville, Ga.-based Metro City Bank earned the top place thanks in-part to the bank’s almost 70% increase in total loans, hitting $967.3 million at year-end 2016. 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%. 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%.
“The performance of the finalists is extremely impressive, especially in such a competitive banking environment,” said J.P. O’Sullivan, Senior Director of Global Financial Institutions at S&P Global Market Intelligence. “Community banks and credit unions are an integral part of their local economies, helping people & businesses access credit and drive dollars back into the community. Each of these institutions has demonstrated a clear commitment to excellence, and the results speak for themselves.”
- Click here to see list of the top 100 community banks between $1 billion and $10 billion in assets for 2016.
- Click here to see the list of the top 100 community banks under $1 billion in assets for 2016.
- Click here for the 2016 ranking of the 50 top-performing U.S. credit unions.
S&P Global Market Intelligence ranked the best-performing community banks using six core financial performance metrics: pretax return on average tangible common equity, net charge-offs as a percentage of average loans, efficiency ratio, adjusted Texas ratio, net interest margin on a fully taxable equivalent basis and loan growth. Each company's standard deviation from the industry mean was calculated for every ranking metric, equally weighted, then added together to calculate a performance score. To help normalize the data and mitigate the impact of outliers, caps and floors were applied for each metric.
For this year's ranking, pretax return on average tangible common equity replaced return on average tangible assets as one of the six metrics. All of the other ranking metrics remained the same.
S&P Global Market Intelligence defined community banks 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.
Unlike in previous years, savings & loan holding companies, as well as savings banks and savings & loan associations were included in the ranking. Additionally, previous years' branch threshold of 60 was removed.
For the $1 billion-to-$10 billion ranking, S&P Global Market Intelligence ranked companies at the holding company level if consolidated data was reported; otherwise, the bank subsidiary was used. Companies that have parents with assets above $10 billion were excluded. For the under-$1 billion ranking, companies with a parent with more than $1 billion in assets were excluded. Based on these criteria, 546 companies were eligible for the $1 billion-to-$10 billion ranking, and 4,585 banks and thrifts were eligible for the under-$1 billion ranking.
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%. Based on these criteria, 508 credit unions qualified for the ranking.
S&P Global Market Intelligence will recognize the top performers in person at the sixth annual Community Bankers Conference on April 4 at the JW Marriott in New Orleans, LA. The conference features community bankers and advisors from across the country sharing operational and financial strategies they've found useful in driving profitability. Details and registration can be found here.
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