Regional ROA, ROE ranks led by Arkansas banks

by Paul Gatling (pgatling@nwabj.com) 41 views 

In the third quarter of 2016, the average return on assets (ROA) for Arkansas banks was 1.33%, ranking the state’s lenders as the top performers among the seven states that make up the U.S. Federal Reserve Bank’s Eighth District.

The percentage represents an increase of 0.08% in the state’s collective ROA from the third quarter of 2015.

ROA, as defined by the Federal Deposit Insurance Corp., is “net income after taxes and extraordinary items [annualized] as a percent of average assets.” Banks generally consider their annual ROA percentage a top indicator of their health and profitability.

Arkansas banks are ahead of the Eighth District average of 1.12% and the national average of 1.02%

For the same quarter, United Bank of Springdale had an ROA of 1.04%, Cornerstone Bank of Eureka Springs had an ROA of 1.52% and Conway-based Centennial Bank had an ROA of 1.89%.

In the category of return on average equity, or ROE, Arkansas banks also rank first at 10.55% in the third quarter of 2016. That represents an increase of 0.24% from the third quarter of 2015.

Arkansas is one of the three states in the Eighth District with an ROE of at least 10%, along with Kentucky (10.46%) and Missouri (10.43%).

ROE, as defined by the FDIC, is “annualized net income as a percent of average equity on a consolidated basis.”

The Eighth District ROE average in the third quarter of 2016 was 9.87%.

Among Arkansas banks, Searcy-chartered First Security Bank had an ROE of 12.14%, Little Rock-based Bank of the Ozarks had an ROE of 12.78% and First Western Bank of Booneville had an ROE of 6.73%.

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