1Q Data Shows Arkansas Banks At Top of ROA, ROE Rankings

The average return on assets, or ROA, of Arkansas banks surged to 1.26 percent in the first quarter of 2013, making the state the top performer among the seven states in the U.S. Federal Reserve Bank’s Eighth District.

The percentage represents an increase of 0.25 percent in the state’s collective ROA from the first quarter of 2012.

Banks generally consider their annual ROA percentage a top indicator of their health and profitability.

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

Arkansas is the only state wholly in the Eighth District. The other six states are partially in the Eighth and partially in another.

Arkansas banks are also beating the national average of 1.12 percent and the Eighth District average of 1.01 percent.

For the same quarter, Cornerstone Bank of Eureka Springs had a 1.6 percent ROA; Springdale-based United Bank had a 1.41 percent ROA; and Iberiabank of Lafayette, La., had an ROA of 0.09 percent.

In the category of return on average equity, or ROE, Arkansas banks jumped to 10.85 percent for the first quarter of 2013. That ranks first in the Eighth District, and represents an increase of 1.98 percent from the first quarter of 2012.

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

Arkansas is the only bank in the Eighth District with an ROE of at least 10 percent, and is the only state in the district beating the national ROE average of 9.9 percent.

Collectively, Eighth District banks had an ROE of 9.19 percent, down from 9.75 percent in the first quarter of 2012.

Bank of the Ozarks of Little Rock had an ROE of 15.15 percent in the first quarter of 2013; Summit Bank of Arkadelphia showed an ROE of 10.94 percent; and The Bank of Fayetteville had an ROE of 11.12 percent.