Arkansas Banks Lead Way In ROA, ROE Rankings

The average return on assets, or ROA, of Arkansas banks rose slightly to 1.25 percent in the second quarter of 2014, and the state is still the top performer among the seven states in the U.S. Federal Reserve Bank’s Eighth District.

The percentage represents an increase of 0.02 percent in the state’s collective ROA from the second 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 1.1 percent and the national average of 1.03 percent.

For the same quarter, Signature Bank of Arkansas of Fayetteville had a 0.39 percent ROA; Springdale-based United Bank had a 1.44 percent ROA; and Arvest Bank of Fayetteville had an ROA of 0.79 percent.

In the category of return of average equity, or ROE, Arkansas banks also rank first at 10.53 percent in the second quarter of 2014. That represents a decrease of 0.08 percent from the second quarter of 2013.

Arkansas is one of three states 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.”

Pinnacle Bank of Rogers had an ROE of 3.76 percent in the second quarter of 2014; Gravette-chartered Bank of Gravett showed an ROE of 5.43 percent; and First National Bank of Paragould had an ROE of 10 percent.