S&P Global Market Intelligence Ranks the Best-performing Community Banks for 2017

S&P Global Market Intelligence has released its rankings of 2017’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. In the category of best-performing community banks with assets under $1 billion, Arizona’s Metro Phoenix Bank took the No. 1 spot after reporting a 23.39 percent pretax return on average tangible common equity, strong loan growth and a 5.90 percent net interest margin. Other Southwest-based banks in the Top 10 include First Bank of Owasso in Owasso, Oklahoma, at No. 2 and Texas Republic Bank NA in Frisco coming in at No. 4.

Texas Republic Bank’s No. 4 ranking makes it the fourth time in the past five years the bank has held that position. “Most people would probably think that our bank applied to be considered for this recognition—but, in fact, S&P Global objectively ranks every bank in the country to determine the top performers,” says David Baty, Texas Republic Bank’s president and CEO. “To make this list for just one year is remarkable, but to do it four out of the past five years is outstanding and causes great pride in our team of professionals.”

According to S&P, there are approximately 5,000 banks in the U.S. under $1 billion in assets, but only 4,383 of those banks met the criteria to be considered for ranking.

Of the best-performing community banks with assets between $1 billion and $10 billion, Sterling Bancorp Inc., based in Southfield, Michigan, earned the top spot; the company completed an initial public offering on November 16 and its stock has since returned 21.3 percent as of March 9, compared to a 8.4 percent gain for the S&P 500. The highest ranking for a Southwest-based bank is Independent Bank Group Inc. in McKinney, Texas, which came in at No. 13.

For the $1 billion-to-$10 billion ranking, S&P 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, 533 companies were eligible for the $1 billion-to-$10 billion ranking.

S&P ranked the best-performing community banks—defined as institutions with up to $10 billion in assets—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 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.

S&P Global Market Intelligence will recognize the 2017 top-performing banks in person at the seventh annual Community Bankers Conference, April 11–13 in Orlando, Florida (goo.gl/ygiB9f).

“We see community banks and credit unions as a critical engine for the overall U.S. economy,” says J.P. O’Sullivan, senior director of financial institutions at S&P Global Market Intelligence. “The value that [they] continue to provide in their communities and local economies is integral to the growth of businesses and people accessing credit.”

Southwest-based community banks with assets less than $1 billion:

It’s no surprise that S&P Global Market Intelligence’s 2017’s 100 best-performing banks include more than a few from the Southwest region of the U.S.

  • 1 Metro Phoenix Bank, Phoenix, Arizona
  • 2 First Bank of Owasso, Owasso, Oklahoma
  • 4 Texas Republic Bank NA, Frisco, Texas
  • 12 Wallis State Bank, Wallis Texas
  • 13 Bank 7, Oklahoma City, Oklahoma
  • 14 Citizens State Bank, Miles, Texas
  • 17 Bank of the West, Thomas, Oklahoma
  • 25 First National Bank of McGregor, McGregor, Texas
  • 33 RiverBank, Pocahontas, Arkansas
  • 36 First National Bank of Eldorado, Eldorado, Texas
  • 39 Charter Bank, Corpus Christi, Texas
  • 40 State Bank of Texas, Dallas, Texas
  • 46 Bank of Hydro, Hydro, Oklahoma
  • 49 Main Bank, Albuquerque, New Mexico
  • 50 Riverside Bank, Sparkman, Arkansas
  • 51 Tejas Bank, Monahans, Texas
  • 52 Horizon Bank SSB, Austin, Texas
  • 54 Waggoner National Bank of Vernon, Vernon, Texas
  • 58 HomeBank Texas, Seagoville, Texas
  • 64 Citizens National Bank of Texas, Waxahachie, Texas
  • 80 Prime Bank, Edmond, Oklahoma
  • 81 AmeriState Bank, Atoka, Oklahoma
  • 89 Security First National Bank of Hugo, Hugo, Oklahoma
  • 92 1st Bank & Trust, Broken Bow, Oklahoma
  • 95 Citizens Bank of Las Cruces, Las Cruces, New Mexico
  • 98 Commercial Bank, Mason, Texas

Southwest-based community banks, $1 billion–$10 Billion in Assets:

  • 13 Independent Bank Group, McKinney, Texas
  • 26 Olney Bancshares of Texas, Olney, Texas
  • 32 WestStar Bank Holding Co., El Paso, Texas
  • 35 Inwood Bancshares, Dallas, Texas
  • 40 Post Oak Bancshares, Houston, Texas
  • 42 Home Bancorp, Lafayette, Louisiana
  • 48 Triumph Bancorp, Dallas, Texas
  • 58 Renasant Corp., Tupelo, Mississippi
  • 63 First-West Texas Bancshares, Abilene, Texas
  • 71 Veritex Holdings, Dallas, Texas
  • 75 Southside Bancshares, Tyler, Texas
  • 88 AFNB Holdings, Houston, Texas
  • 92 First Security Bancorp, Searcy, Arkansas

Published in Bankers Digest April 2, 2018