Arkansas Banks Second in Regional ROA, ROE Rankings

The average return on assets of Arkansas banks in the fourth quarter of 2013 was 1.23 percent, making the state the second-best performer among the seven states in the U.S. Federal Reserve Bank’s Eighth District.

The percentage represents a 0.06 percent increase in the state’s collective return on assets, or ROA, from the fourth quarter of 2012.

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

Missouri banks performed best in the fourth quarter, with a return on assets of 1.24 percent.

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 ahead of the national average of 1.06 percent and the Eighth District average of 1.03 percent.

For the same quarter, Cornerstone Bank of Eureka Springs had a 1.59 percent ROA; Fayetteville-chartered Arvest Bank had a 0.90 percent ROA; and Little Rock-based Bank of the Ozarks had an ROA of 2.17 percent.

In the category of return of average equity, or ROE, Arkansas banks also rank second at 10.63 percent in the fourth quarter of 2013. That ranks second in the Eighth District, and represents an increase of 0.43 percent from the fourth quarter of 2012.

Missouri banks jumped to 12.32 percent, tops in the region. Indiana, at 10.25 percent, is the only other state in the Eighth District with an ROE of at least 10 percent.

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

Legacy National Bank of Springdale had an ROE of 5.59 percent in the first quarter of 2013; Summit Bank of Arkadelphia showed an ROE of 11.23 percent; and The Bank of Fayetteville had an ROE of 5.56 percent.