First Security Leads Local Pack in ROE

In addition to historically ranking area banks by return on assets, the Northwest Arkansas Business Journal also frequently lists the institutions by return on equity.

For a look at both lists, click here.

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

It also can be explained as a profitability ratio that measures how well equity capital is used. Or, as one bank president said, ROE is “what you’re doing for your shareholders.”

For the second consecutive year, First Security Bank tops both lists. Its 22.89 percent ROE for the year that ended Dec. 31 is up about 8.9 percent from the previous year.

Also like last year, Priority Bank ranked second in ROE at 18.91 percent, down about 6.9 percent from the year that ended Dec. 31, 2010.

Rounding out the top five for 2011 are The First National Bank in Green Forest (14 percent), Citizens’ Bank & Trust Co. (13.6 percent) and INTRUST Bank NA (12.1 percent). Delta Trust & Bank Corp. and Cornerstone Bank also had ROE higher than 10 percent.

The top five banks by ROA are First Security (2.31 percent), Priority Bank (1.65 percent), The First National Bank in Green Forest (1.44 percent), Citizens’ Bank & Trust (1.38 percent) and First National Bank of North Arkansas (1.27 percent), previously known as First National Bank of Berryville.