Profitability remains a challenge for banks and thrifts with less than $2 billion of assets. The median return on equity for publicly traded institutions in this size range is edging upward, from 3.48 percent in 2010, to 4.36 percent in 2011, and to 5.63 percent in 2012. But even with these gains, the ROE for the group still falls short of a cost of equity generally projected to be more than 9 percent.
Here we rank the best performers, based on their average return on equity over the past three years. These institutions are faring better than their overall peer group—the median ROE for the top 200 rose from 9.57 percent in 2010 to 10.01 percent in 2011 and to 10.15 in 2012—but the pressure on profitability is evident.
The three-year average ROE helps illustrate the point. By that measure, those that earned a spot on our annual list had a median of 9.58 percent, data from SNL Financial indicates. That is roughly unchanged from the 9.56 percent median for our top 200 last year.
It also is worth noting that about 70 of the institutions that performed well enough to be ranked here still have a three-year average ROE below the 9 percent mark.
Larger institutions generally are doing better than their counterparts. The median asset size for those on this list is $600 million. For the overall peer group, the median asset size is smaller by roughly a third, at $377 million.