Arkansas Banks Top Region in ROA, ROE Rankings

The average return on assets, or ROA, of Arkansas banks was 1.26 percent in the third 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 only a negligible increase of .02 percent in the state’s collective ROA from the third 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 district.

Arkansas banks are also beating the national average of 1.05 percent and the Eighth District average of 0.94 percent.

In the category of return on average equity, or ROE, Arkansas banks jumped to 10.76 percent for the third quarter of 2013. That also ranks first in the Eighth District, and represents an increase of 0.92 percent from the third 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 one of just two states in the Eighth District with an ROE of at least 10 percent. Indiana ranks second at 10.11 percent.

Collectively, Eighth District banks had an ROE of 8.66 percent, up slightly from 8.44 percent in the third quarter of 2012.