Arkansas Banks Lead Way in 2Q ROA

The average return on assets, or ROA, of Arkansas banks dropped slightly to 1.20 percent in the second quarter of 2015, 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 second quarter of 2014.

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 0.99 percent and the national average of 1.04 percent.

For the same quarter, United Bank of Springdale had a 0.43 percent ROA; Rogers-based Pinnacle Bank had a 0.32 percent ROA; and First Security Bank of Searcy had an ROA of 2.23 percent.

In the category of return of average equity, or ROE, Arkansas banks rank fourth at 9.90 percent in the second quarter of 2015. That represents a decrease of 0.71 percent from the second quarter of 2014.

Kentucky (10.29 percent) is the only state in the Eighth District with an ROE of at least 10 percent, followed by Missouri (9.93) and Illinois (9.91).

Bear State Bank of Little Rock had an ROE of 5.96 percent in the second quarter of 2014; Danville-chartered Chambers Bank showed an ROE of 7.87 percent; and Today’s Bank of Huntsville had an ROE of 9.46 percent.