Achieving a double-digit return on average equity is no small feat these days. Shrinking profits — brought on by loan losses, securities writedowns, higher deposit insurance premiums, you name it — reduced the industry average to the low single digits in 2008, and, with credit quality still weakening, conditions aren't likely to improve much for at least several more quarters.

As these rankings (a link to which can be found at right), however, there are a number of mid-tier banks (with assets between $2 billion and $10 billion) out there that have largely avoided the land mines and are still delivering solid, if not spectacular, returns. Tops among them is Westamerica Bancorporation, the only company among the mid-tiers that still boasts a 3-year average ROE above 20 percent. One secret to its success is expense control — its 39.77 percent efficiency ratio in 2008 was among the industry's best. The companies ranked second and third, Wilshire Bancorp and Bank of the Ozarks, also had efficiency ratios below 50 percent.

How these and other top mid-tiers perform going forward remains to be seen, however. Most mid-tiers, Westamerica included, reported declines in ROE from a year earlier, and that trend is likely to continue throughout 2009, and perhaps beyond, as profits decline and banks, to satisfy investors and regulators, are forced to raise more common equity.

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