Arkansas Third in ROA, Fifth in ROE Rankings
by September 17, 2012 12:00 am 66 views
In the second quarter of 2012, Arkansas banks had a return on their average assets of 1.09 percent, ranking No. 3 among the seven states in the U.S. Federal Reserve Bank’s Eighth District.
That figure represents a slight decline of 0.02 percent in the state’s collective ROA from the second quarter of 2011. Banks generally consider their annual ROA percentage a quality indicator of their success and performance.
The Federal Deposit Insurance Corp. defines ROA as “net income after taxes and extraordinary items [annualized] as a percent of average total assets.”
Guy Cable, regional president at First National Bank of Rogers, said making it through the recession and maintaining an ROA of 1.09 is a tribute to the state’s community bankers and business leaders.
“Every banker will verify that it’s been a tough past four years,” he said. “But the statistic reflects that Arkansas has been blessed with a somewhat diverse economy and lower than national unemployment rates.”
Arkansas is the only state wholly in the Eighth District. The other six states are partially in the Eighth and partially in another.
Arkansas and Tennessee — which ranks No. 7 with an ROA of zero percent — were the only states in the Eighth District to show a decrease from the second quarter of 2011. The collective ROA for the district as a whole was 0.9 percent, up slightly from 0.73 percent in the same quarter last year.
For the same quarter, Cornerstone Bank of Eureka Springs had a 1.69 percent ROA; Fayetteville-chartered Arvest Bank had a 0.39 percent ROA; Little Rock-based Bank of the Ozarks had a 2.04 percent ROA; and United Bank of Springdale had a 1.08 percent ROA.
In terms of return on average equity, Arkansas banks were collectively at 9.57 percent for the second quarter of 2012.
That figure ranks fifth among the Eighth District, and reflects a drop of 0.49 percent from the second quarter of 2011.
The FDIC defines ROE as “annualized net income as a percent of average equity on a consolidated basis.”
Collectively, banks in the Eighth District had an ROE of 8.26 percent, up from 7.07 percent in the second quarter of 2011. The U.S. ROE average was 8.66 percent.
For the same quarter, Jonesboro-based Liberty Bank of Arkansas had a 6.42 percent ROE; Community First Bank of Harrison had a 9.64 percent ROE; Chambers Bank of Danville had a 13.3 percent ROE; and First State Bank of Lonoke had a 4.45 percent ROE.