Community banks were still playing defense in 2024, but those that could expand core deposits while maintaining low operating expenses stood out from the rest.
A combination of cheap deposits and higher yields on assets helped drive American Banker's 2025 list of top-performing public banks with under $2 billion of assets.
Claude Hanley, a founder and partner of Capital Performance Group, said growing core deposits last year for community banks felt "like a salmon swimming upstream." Ratcheting up the cheaper funding was also key to companies' outperformance, he said.
Top-performing small banks increased core deposits by 5.03%, on average, compared with 2.49% growth across all peers.
"For the most part, profits were down," Hanley said. "2024 was a challenging year, in terms of profitability. What distinguished top performers from all [the rest] was preservation of the margin … it was who could preserve the margin in a tough, tough operating environment."
Net interest margin among the top-performing banks expanded by three basis points, while the average NIM across banks of that size contracted.
Loan growth and credit quality were less impactful in driving banks' financial performances, as interest rates remained elevated through most of 2024.
The banks with the strongest financials also generated slightly higher fee income and spent less on operations, in part because they were mostly on the larger end of the group under $2 billion of assets. That revenue balance helped the top-performing banks exceed the average efficiency ratio by more than 10 percentage points.
Hanley said the larger community banks have been able to get ahead of peers on technology investments that have likely helped cut down expenses.
"Community institutions have been working diligently to become more efficient," Hanley said. "Basically adopt automated solutions and technology that enables them to essentially support greater volume with data, increased level expenses."
Capital Performance Group compiled its report using data provided by S&P Global Market Intelligence, based on the Securities and Exchange Commission and other regulatory filings.
Here are the 20 top-performing public banks with under $2 billion of assets, using data from 2024. See the bottom of the page for the full list. The ranking of banks with $2 billion to $10 billion in assets is scheduled to be published July 11.
Oak Valley's ROAE slides
The $1.9 billion-asset company, which operates 18 branches through its banking subsidiary, made the top 20 list for 2024 performance, a jump from its 24th place in the ranking for the year prior.
The company saw net income fall by 19.13% in 2024, due to an increase in deposit interest expense and general operating expenses, the company said in an earnings release. Oak Valley's noninterest expenses grew 11.14%.
Despite making positive headway on reversing loan-loss provisions and growing total loans, the company's return on average equity decreased in 2024 by about 34%. Still, the company's net interest margin of 4.07% exceeded the average.
PB Financial gets boost from acquisition
The Rocky Mount, North Carolina, company was the only top 20 performer of the group that executed an acquisition in 2024, with its purchase of Coastal Bank and Trust in April. In its annual report, President and CEO Ted Whitehurst said the deal expanded the bank "by every metric."
"The Coastal Bank & Trust merger has strengthened our position, and we remain committed to efficiency, superior service, and community engagement," Whitehurst wrote in the report.
The bank's assets, core deposits and loans grew by 34.08%, 47.98% and 36.3%, respectively. But noninterest expenses also shot up 54.33%, by far the most of the group.
PB dropped from 16th in the 2023 ranking to 19th for last year's performance, as its return on average equity for 2024 was the lowest among the top 20 banks.
FFD's noninterest expenses rise
The company operates in Ohio through its subsidiary, First Federal Community Bank, and grew assets, loans and core deposits in 2024. But the $845 million-asset bank's noninterest expenses also rose 9.82%.
The bank said in a release that expenses climbed due to increased headcount, wage inflation and account growth.
While revenue rose 6.68%, net income remained fairly static in 2024 compared with 2023.
FFD also posted above-average credit-quality metrics compared to peers, such as a low ratio of nonperforming loans to gross loans, a low nonperforming assets to total assets ratio and a high reserves to nonperforming assets ratio.
Denali moves up
Denali Bancorp., the second-smallest of the top 20 performers with $511 million of assets, hopped from 33rd place in the ranking to 17th. Its subsidiary, Denali State Bank, posted a net interest margin of 5.31%.
The Fairbanks, Alaska-based company saw modest loan and deposit growth but below average among peers. Net income also fell by 12.7%, and revenue slid 1.01%, though Denali offset some of the pain by keeping noninterest expenses roughly flat.
Denali's total risk-based capital ratio was about 17.1%, while its ratio of nonperforming assets to total assets was the highest of the top 20 peers, at 0.85%.
First Ottawa's core deposits jump
The $1.7 billion-asset company operates through two subsidiaries — American Commercial Bank and Trust and First National Bank of Ottawa.
Steven Gonzalo, president and CEO of the company, wrote in the annual report that 2024 "was a journey that began by working through various market-related challenges and ended with the emergence of several catalysts that we believe will support continued growth and profitability heading into 2025."
He said the rate cuts helped spur core deposit and loan growth, along with revenue and income growth.
First Ottawa saw a 20.82% jump in core deposits — the second most of the top 20 performers — along with 16.25% loan growth, 10.26% revenue growth and 35.62% net income growth. The jump in financial performance also pushed the bank up from 26th in the ranking to 16th.
Minster's provisions increase
The $757 million-asset company that operates through its banking subsidiary in western Ohio has some half-a-dozen branches and more than 100 employees.
The bank, which was ranked 22nd in its cohort for 2023 financial performance, posted loan and asset growth but saw net income contract mildly in 2024, as provisions for loan losses increased by more than 90%. Still, Minster had a total risk-based capital ratio of 18.11% — above the average cushion of 16.46% among peers.
Minster, which was founded in 1914, kept core deposits relatively flat in 2024 from the prior year.
Uwharrie's core deposits slip
The Albemarle, North Carolina, company operates through its banking subsidiary across North Carolina.
While the $1.1 billion-asset bank saw loans and net income grow in 2024, core deposits fell by 3.61%.
Uwharrie's reduction in its provisions for loan losses outpaced other top 20 performers, dropping by more than 180% in 2024 from the prior year — a sign that it got a better handle on credit quality last year.
But the bank also delivered the highest efficiency ratio of the top 20 banks, at 70.72%, suggesting it spent more to generate revenue in 2024 than its peers. Uwharrie wrote in its 2024 annual report that it is committed to "ensuring that growth is not only inclusive but also sustainable."
First IC's loans, core deposits grow
The parent company of First IC Bank in Georgia operates 10 branches across Georgia, Texas, New York, New Jersey and California, along with loan production offices in Los Angeles and Seattle.
The company's bottom line stayed fairly flat in 2024 from the prior year, though loans and core deposits grew at a healthy clip compared to peers.
First IC Bank also posted the highest loan-to-deposit ratio among the top 20 banks, at about 100.87%, meaning it's still actively lending out deposits even as the industry has raised its guard around liquidity concerns. A major chunk of First IC's loans are in commercial real estate.
The bank was founded in 2000, intentionally headquartered in Doraville, Georgia, a "thriving, multi-ethnic community" just outside of Atlanta.
Mission's NIM hit by rate cuts
The $1.88 billion-asset bank in Bakersfield, California, delivered stagnant earnings for the year, as loans and deposits grew but were offset by net interest margin, which was negatively impacted by rate cuts in the fall.
Mission specializes in services for construction, land development, farming and agricultural businesses.
"We closed the year sustaining our double-digit annualized deposit growth trend of the past three quarters, reporting a 15% annual increase despite the pressure of elevated rates and the intense competition for deposits, even from the U.S. Treasury Department," said Mission President and CEO AJ Antongiovanni in an earnings release.
Still, the bank's bottom line decreased by 1.07%, as its assets didn't reel in as much yield following the rate cuts.
Bank7 sees surge in ROAE
The $1.7 billion-asset, Oklahoma City-based company saw its ROAE in 2024 increase by more than six percentage points from the prior year.
The bank saw the strongest annual net income growth among the top performers, at 61.62%. Bank7's growing mortgage services and shrinking credit quality issues helped fuel its bottom line in 2024.
"Our properly matched balance sheet, disciplined cost controls, and excellent credit quality continues to produce outstanding performance," said the bank's president and CEO, Thomas Travis, in an earnings release.
Earlier this year, Bank7 also announced its acquisition of First American Mortgage, marking the bank's latest move to bulk up its mortgage business.
Plumas's SBA lending boosts loan growth
The $1.6 billion-asset company operates through its Northern California-based banking subsidiary, Plumas Bank. The bank operates 15 branches across California and Nevada, along with two loan production offices in California and Oregon.
The bank fell a few spots in its ranking, from eighth based on its 2023 performance.
In its year-end earnings release, President and CEO Andrew Ryback said Small Business Administration lending boosted its loan growth. The bank also executed a sale-leaseback transaction to pad a balance sheet restructuring, as the bank sold underwater bonds for higher-yielding securities.
This year, the bank announced it would acquire Cornerstone Community Bancorp in Northern California, creating a combined institution of $2.3 billion of assets.
Cornerstone was sixth on the top-performing banks list for 2023 financial performance but dropped to 86th for 2024. The bank had to charge off nearly $10 million worth of agricultural loans in October, putting it at a net loss for the year. Cornerstone President and CEO Matt Moseley said at the time that the bank expected, "some level of recovery from the bank's collateral but the timing and amount is still unknown."
Esquire Financial gains
Esquire, which offers banking services specific to lawyers and the legal industry, leaped up eight spots among the top-performing banks from its 2023 performance to 2024. The company, which has one branch office on Long Island, also serves some commercial and retail customers in the New York City metropolitan area.
The $1.9 billion-asset bank — one of the largest of the top 20 — has continued to invest in technology and customer experience, bulked up its senior regional business development officers in 2022 and is opening a private banking branch in Los Angeles. The additional workforce helped "significantly grow core deposits nationally as well as higher yielding commercial litigation or law firm loans," said Chairman Tony Coelho in an earnings release.
"We coupled this focus with tempering our New York metro real estate lending in response to the current market sentiment and instead invested excess cash flow from core deposits in short duration agency mortgage-backed securities with commensurate risk adjusted yields," he added.
Central Bank's ranking jumps
The Michigan-based company jumped the most spots on the top-performing list, up from 20th for 2023's financial performance.
The company is also the smallest bank on the list, at about $457 million of assets — operating across nine locations, with about 60 employees. The bank's net interest margin exceeded the average among peers by nearly 70 basis points.
Central Bank Corp. stood out on annual revenue growth in 2024, at 27.7%, while the average of its cohort was 3.95%. The bank also kept a lid on expenses.
The company, headquartered in a town on the border of Canada, also reels in income from foreign transaction fees.
Truxton's expenses rose
The $1.5 billion-asset holding company for Truxton Trust primarily provides wealth and family office services, along with banking, for "wealthy individuals, their families and their business interests."
The company saw relatively flat earnings despite "the headwinds of mostly one-time expenses related to our technology and physical office upgrades," said Truxton Chairman Tom Stumb in a prepared statement earlier this year. Expenses were up more than 17.42% in 2024.
The bank also turned out the smallest net interest margin among the top performers of its cohort, instead pulling its profits from other financial services. Revenue from wealth services, which makes up nearly all of the company's noninterest income, also grew 17% in 2024, the company said earlier this year.
CW Bancorp sees sharp loan growth
The $1.5 billion-asset institution in Southern California was founded to be "all things to some people," focused on services to businesses in the state. The company, through its subsidiary CommerceWest Bank, offers online and mobile banking experiences, including for loan and treasury management products.
The costs of that technology showed up in earnings, though. Noninterest expenses grew by 15.41% in 2024 from the prior year, and net income fell by 25.34%.
Still, the bank saw sharp growth in loans, core deposits and assets.
Chairman and CEO Ivo Tjan said in a prepared statement earlier this year that the growth represents the bank's solutions "tailored to small and mid-sized businesses."
"As we enter 2025, we remain cautiously optimistic despite ongoing economic headwinds, including persistent inflationary pressures," he said in a January release. "Our ability to adapt and innovate positions us well for the future."
BEO Bancorp delivers higher profits
The $868 million-asset company operates in rural towns of eastern Oregon, eastern Washington and western Idaho through its subsidiary, Bank of Eastern Oregon.
The bank jumped from 13th on the list in 2023, delivering higher net income. In its 2024 annual report, President and CEO Jeff Bailey said "strong, steady liquidity and capitalizing on opportunity in our investment portfolio" boosted the bottom line.
He added, though, that 2024 was "a tougher year for grain, row crop and hay growers" due to falling commodity prices combined with still-elevated expenses. But cattle prices remained strong, driven by tight supply, he said.
"Agriculture is a cyclical business, and over the years our producers and your bank have weathered those cycles," he said in the report.
The bank also added a new branch in December, bringing BEO to 22 branches and two loan production offices across the three Northwestern states.
Thomasville moves up
The company, which operates through Thomasville National bank and TNB Financial Services in Georgia, is one of the largest banks in its cohort, at $1.89 billion of assets. The bank jumped up from seventh place last year, as its growth of assets, loans and deposits far outpaced the average.
Chairman and CEO Stephen Cheney said in a prepared statement earlier this year that even "in this time of economic uncertainty," the bank had continued to increase its loans and deposits. It also had the second-lowest efficiency ratio of the top banks, signaling that it spent less in costs to generate its revenue.
The company's trust and investment division is a "strong contributor" to growth in assets, deposits and loans, Cheney wrote in the company's 2024 annual report. He added that the bank also continues to make "significant investments" in technology for digital banking and fraud detection. The bank's annual noninterest expenses grew 12.88% in 2024, nearly double the average expense growth.
Solera National stays at third
The $1.1 billion-asset company in Colorado has operated through Solera National Bank for nearly 20 years, targeting emerging businesses and real estate investors. The bank maintained its third-place spot on the list from the previous year.
Solera spent 2024 shrinking core deposits by 12.5%, and decreasing assets by 4.67%. Still the bank grew net income by 8.28%, buoyed by a 13.22% rise in revenue. In 2024, the bank restructured its balance sheet, decreasing its total cash and cash equivalents by half and remixing its securities portfolio for higher-yielding assets.
Banks across the country have spent recent years trying to dump bond portfolios that were bought in a low-rate environment that have sent their securities books underwater.
FNB Bancorp attributes success to long-time staff
FNB Bancorp, which operates 12 branches in Southeastern Pennsylvania through First National Bank and Trust, landed second in 2024, up from fourth in 2023.
Daniel Schaffer, president and CEO of the bank, said in a letter on the company's website that FNB is focused on providing deposit, lending and wealth management services to residents of Bucks County, Pennsylvania. He said more than 40% of the bankers at FNB have been part of the company for at least 15 years.
"In an era of bank mergers and consolidations, The First National Bank and Trust Company of Newtown is not going anywhere," Schaffer said in the letter.
Although the bank's bottom line decreased by 14.09%, its credit quality metrics outperformed peers.
FFB Bancorp tops list again
The $1.5 billion-asset company based in Fresno, California, operates through FFB Bank and topped the list of public banks under $2 billion of assets for the second consecutive year. However, recent compliance slips may put pressure on its performance in 2025.
Earlier this year, the bank was hit with a consent order by the Federal Deposit Insurance Corp. and the California Department of Financial Protection and Innovation related to its anti-money-laundering controls and its countering the financing of terrorism program. FFB was dinged for its merchant services program and independent sales organizations, which are a major driver of its noninterest-bearing deposits.
In March, the bank said it would exit six of those relationships during the second quarter, which would result in higher funding costs "to support forecasted loan portfolio growth." Additionally, expenses will rise as the bank hires more risk staff, spends on legal and consulting services and implements new monitoring software to meet compliance requirements.
The bank's noninterest expenses in 2024 were up some 28.04% from the prior year, compared with average expense growth of 6.48% among peers.