Data Shows Arkansas Banks At Top of ROA, ROE Rankings

The average return on assets, or ROA, of Arkansas banks dipped slightly to 1.2 percent in the first quarter of 2014, but the state is still the top performer among the seven states in the U.S. Federal Reserve Bank’s Eighth District.

The percentage represents a decrease of 0.05 percent in the state’s collective ROA from the first quarter of 2013.

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 ahead of the Eighth District average of 1.02 percent and the national average of 0.99 percent.

For the same quarter, Cornerstone Bank of Eureka Springs had a 1.57 percent ROA; Springdale-based United Bank had a 1.44 percent ROA; and Iberiabank of Lafayette, Louisiana, had an ROA of 0.72 percent.

In the category of return of average equity, or ROE, Arkansas banks also rank first at 10.18 percent in the first quarter of 2014. That represents a decrease of 0.59 percent from the first quarter of 2013.

Arkansas is the only 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 4.76 percent in the first quarter of 2014; Pinnacle Bank of Rogers showed an ROE of 3.76 percent; and The Bank of Fayetteville had an ROE of 6.41 percent.