Three Arkansas banks ranked among Bank Director magazine's list of top mid-size performers in the country, with Bank of the Ozarks of Little Rock taking the No. 1 spot.
Bank Director magazine's annual Bank Performance Scorecard ranked Bank of the Ozarks Inc. first among banks with assets of between $5 billion and $50 billion.
The magazine also published a four-page interview with Bank of the Ozarks CEO George Gleason.
"What we try to do in every market we serve is make every good quality, good yielding loan we can make," Gleason said in the interview. "When we reach the point [where] we've made every good loan we can make, and there's not another loan you can safely make in that market, then we want to stop making loans until we find the next good line."
Home BancShares Inc. of Conway ranked 9th among mid-sized banks, and Bear State Financial Inc. of Little Rock ranked 13th among community banks with assets of between $1 billion and $5 billion.
Bank Director published the 2015 Bank Performance Scorecard, a ranking of the 300 largest publicly traded banks based on 2014 calendar year data, in its third-quarter issue and ranks based on profitability, capitalization and asset quality.
"Our ranking is not a predictive tool for stock valuations," Editor Jack Milligan said in a news release. "Instead, it identifies the banks that have strong fundamentals across three critical areas – profitability, capitalization and asset quality. To me, these are strong, well balanced banks that are built to last."
The Bank Performance Scorecard ranks banks traded on the Nasdaq, OMX and NYSE exchanges, dividing them into three categories: Big banks, with more than $50 billion in assets; mid-sized banks, between $5 billion and $50 billion in assets; and community banks, between $1 billion and $5 billion in assets.
Nationally, Capital One Financial Corp. placed first among the largest banks, with more than $50 billion in assets.
"Superior financial performance in the banking industry is often determined by having a strategy that differentiates one bank against its competitors in a meaningful way, and then doing a great job of executing that strategy," Milligan said.
The magazine used these metrics are used to evaluate bank performance:
- core return on average equity (ROAE) and core return on average assets (ROAA), to measure profitability
- the ratio of tangible common equity (TCE) to tangible assets, to measure capital strength
- and credit quality, gauged through the ratio of nonperforming assets to total loans and real estate owned, and the ratio of net charge-offs to average loans.