First Busey in Champaign, Ill., is back on the all-star team.
The $5.5 billion-asset First Busey is one of 27 small and midsize banks that the investment bank Sandler O'Neill & Partners has identified as all-stars for 2016, as measured by profitability, credit quality and capital strength. Hit hard by last decade's real estate crash — its Busey Bank unit lost $318 million in 2009 — First Busey had been absent from Sandler's annual ranking since 2006.
Sandler, which has been compiling all-star rankings since 2004, announced its class of 2016 on Monday. Also returning to the list of all-stars after at least a 10-year absence were the $5.8 billion-asset WSFS Financial in Wilmington, Del., and the $8.3 billion-asset CVB Financial, the parent of Citizens Business Bank, in Ontario, Calif. They were joined by 10 returning all-stars from 2015 and 11 newcomers. (For a complete list of this year's all-stars, click here.)
To be eligible for all-star status, banks must be publicly traded, have a market capitalization of less than $2.5 billion, and must outperform their peers in five key metrics: earnings-per-share growth, loan growth, deposit growth, return on average equity and ratio of nonperforming assets to total loans. Based on those criteria, 93% of the banks and thrifts eligible were eliminated from consideration.
For the 12-month-period that ended June 30, the median earnings-per-share growth for the 27 all-stars was 24.3%, compared to 8.3% for their peers. Their median loan growth was 19.3% compared to their peers' median of 11.7% and their median deposit growth was 24% compared with 7.5% for their peers. The all-stars' median ROAE of 10.8% was significantly higher than the peer median of 8.1%, according to the Sandler O'Neill report.
For some of the all-stars, acquisitions were a key driver of loan and deposit growth. At least a dozen had closed on acquisitions in 2015 or in the first half of 2016, including CVB, First Busey and WSFS. First Busey, for example, reported a 52% increase in loans year over year, thanks largely to its acquisition of the $1.6 billion Pulaski Bank in St. Louis earlier this year.
Others, though, were able to buck industry trends and substantially increase loans and deposits organically, said Casey Orr, a director at Sandler O'Neill and the report's lead author. All 27 banks reported double-digit loan growth year over year, while 22 of the 27 showed double-digit deposit growth.
As has been the case in recent years, the Mid-Atlantic region was well represented in this year's all-star class; one-third of the banks hailed from New York, New Jersey, Maryland, Delaware and Virginia. That's not surprising, Orr said, given the strength of the New York and Washington economies.
The biggest star of the group is the $6.4 billion-asset Eagle Bancorp in Bethesda, Md., which made the rankings for the fourth consecutive year and for the fifth time in six years. Eagle is primarily a business bank with 20 offices in Maryland, Washington and northern Virginia.
California also fared well, placing six banks on this year's list. The $7.6 billion-asset Bofi Holding in San Diego was an all-star for the fourth consecutive year. Other states represented were Massachusetts, Vermont, Illinois, Missouri, Texas, Tennessee, South Carolina, Alabama, Florida, Texas and Washington.
Newcomers include the $8.2 billion-asset FCB Financial Holdings in Weston, Fla.; the $4.3 billion-asset ConnectOne Bancorp Inc. in Englewood Cliffs, N.J.; and the $2.6 billion-asset Franklin Financial Network in Franklin, Tenn.