First Security Bank Maintains Firm Grip on Lists Top Spots

First Security Bank is first … again.

For the third consecutive year, the Searcy-based bank is at the top of both the Northwest Arkansas Business Journal’s annual return on assets and return on equity lists. Only private banks doing business in the six-county market — Benton, Carroll, Crawford, Madison, Sebastian and Washington counties — were included.

Reynie Rutledge, chairman and CEO of FSB holding company First Security Bancorp, was modest as usual when asked about the bank’s position atop both lists.

“It means we’ve been lucky,” Rutledge said with a chuckle, “and that we’ve got some great people, especially up there in Northwest Arkansas, that work very hard.”

ROA, as defined by the Federal Deposit Insurance Corp., is a bank’s “net income after taxes and extraordinary items [annualized] as a percent of average total assets.”

FSB’s ROA as of Dec. 31 was 2.39 percent. That’s the only number higher than 2 among the 30 banks on the Business Journal’s list.

First State Bank of Northwest Arkansas was second at 1.66 percent, with The First National Bank of Fort Smith (1.31), Citizens Bank & Trust Co. (1.23) and First National Bank in Green Forest (1.19) rounding out the top five.

FSB’s ROA was up from 2.31 percent in 2011 and 2.05 percent in 2010. The bank was No. 1 on the list in both of those instances, and has been ranked sixth or higher in each of the last five years.

Rutledge said whether someone considers ROA or ROE a stronger indicator of a bank’s overall performance has been “a continuing issue,” but he tends to favor ROA.

“I probably do fall a little more on the ROA side, just because when I got into the business, that’s the number that was probably the main focus,” he said. “And, really, I still feel pretty close to that way today.

“Having said that, ROE is important, too.”

By either measure, FSB is No. 1. Its ROE as of Dec. 31 was 20.01 percent, easily better than No. 2 Priority Bank’s 14.09 percent.

The FDIC defines ROE is “annualized net income as a percent of average equity on a consolidated basis.”

Delta Trust & Bank Corp. ranked third at 11.97 percent, and was followed by First State Bank of Northwest Arkansas (11.79) and Citizens Bank & Trust Co. (11.74).

FSB had an ROE of 22.89 percent in 2011 and 21.02 percent in 2010, both tops among private banks in the Business Journal’s coverage area. In the last five years, FSB has ranked no lower than third in ROE.

Rutledge said ROE “can be manipulated a little bit,” but it can be defined as “basically how much money you spend to make a dollar.”

“It’s really a function of our efficiency ratio, which is driven by some very good people working really hard,” he added.

“We’ve just got a lot of really good people who are awfully efficient and thoughtful with regard to operating expenses on a day-to-day basis, but that also work just as hard to keep our customers happy. You can’t lose that customer service piece.”

And for three years in a row, that formula has put FSB in an enviable position regardless of the list.

“We’re happy to be there,” Rutledge said