Bank Comparisons
by July 14, 1997 12:00 am 61 views
“The Regional Economist,” a publication of the Federal Reserve Bank of St. Louis, recently compared banks of the Eighth Federal Reserve District with U.S. peer banks – commercial banks holding less than $15 billion in assets.
Eighth District banks, on average, have historically enjoyed higher return on average assets or ROA than peer banks. But the trend has reversed as the nation’s banks perform better, so that the average ROA for District banks last year was 1.33 percent, compared to peer banks’ average of 1.35 percent.
Four years earlier, District banks reported an average ROA of 1.13 percent while peer banks averaged 1.05 percent.
According to the publication, wages at District banks have risen more rapidly than the national average since 1992: 21.5 percent as compared to 14.4 percent for the national average. District banks wages and benefits averaged $35,449 in 1996, compared to $29,177 in 1992. For peer banks, the average increased from $33,039 to $37,787.
But the publication notes that those higher District wages may be due to a shift in banking activity from rural to urban areas where wages and benefits tend to be higher. About 56 percent of District bank employees worked for institutions headquartered in metropolitan statistical areas in 1992. That percentage had risen to nearly 59 percent by last December.
The article also talked about the ongoing consolidation in banking, citing the number of U.S. peer banks, which fell from 11,290 in December 1992 to 9,402 in December 1996, a 16.7 percent decrease. The number of District banks also dropped, from 1,194 to 1,036, a 13.2 percent decline.
For Arkansas, commercial banks averaged ROAs of 1.32 percent during the fourth quarter of 1996, 1.35 percent during the third quarter and 1.23 percent for the fourth quarter of 1995. Return on average equity was 13.81 percent for the fourth quarter, 14.11 percent for the third quarter and 13.12 percent during the fourth quarter of 1995.
Agricultural banks in Arkansas reported average ROAs of 1.35 percent for the fourth quarter, 1.44 percent for the third quarter and 1.25 percent for the fourth quarter of 1995. Return on average equity was 12.58 percent for the fourth quarter, 13.34 percent for the third quarter and 11.54 percent for the fourth quarter of 1995.