Small Banks Fare Well Among Equity Performers

Four of the local banks among the Top 10 with the best first-quarter returns on equity were small to mid-sized shops with under $90 million in deposits.

The best of that group, Huntsville’s First State Bank with $58.6 million in deposits, earned a 28 percent return on its equity. The best overall was Arkansas National Bank N.A. in Bentonville. Dan J. Dykema, Arkansas National’s president & CEO, said bank’s first quarter ROE was its best in its nine-year history.

“The real estate market, with a lot of continued refinancing, was really good in the first quarter,” Dykema said. “Our real estate fee income was really good.”

Arkansas National is one of only four local banks in the market that are sub chapter “S” corporations, meaning that taxes are paid at the individual shareholder level rather than at the corporate level (see chart). The Northwest Arkansas Business Journal adjusted the ROEs for “C” corporations for taxes to make an apples-to-apples comparison.