Illinois community bankers have the earnings spigot wide open. The state's 624 small banks return 1.20% on average assets for first quarter 1994 and 1.25% at yearend 1993.

The group, all of which have assets less than $2 billion, outperformed the state's eight largest banks, which combined reported a first quarter ROA of 0.49% and a yearend ROA of 1.09%.

Gladstone-Norwood Trust and Savings Bank is one of the most dramatic turnaround stories of the community group. It returned 1.79% on average assets in the first quarter, bouncing back from a dismal -0.13% ROA in 1992.

"We tend to believe we can continue to grow," said Gene Mroz, chairman and chief executive of the $130 million-asset bank. "Our future looks very bright."

Mr. Mroz's upbeat assessment of his own bank is likely to pervade the Community Bankers Association of Illinois' annual convention, which began Thursday and runs through Sunday in St. Louis. Bankers can boast about the fact that many Illinois community banks easily surpassed the state average ROA.

First Bank of Oak Park, for one, returned 6.31% on assets for the first quarter and its sister bank, Cosmopolitan Bank and Trust, Chicago, returned 5.65%. The banks are subsidiaries of FBOP Corp., whose officials declined to comment on their performance.

But James R. Lampe didn't hesitate to tout Germantown Trust and Savings Bank's stellar record. He said the bank has kept a lid on overhead and it's very well capitalized.

"We budget every year ... at 1.95[%] to 2%," said Mr. Lampe, who is chairman, president, and chief executive of the $94 million-asset bank. "It's getting harder. The operations end of it is getting to be pretty costly."

Still, return on assets at Germantown Trust and Savings have been a steady 2.01% as of this year's first quarter, and 2.06% and 2.09% for yearend 1993 and 1992 respectively.

Robert I. Glickman, president and chief executive of $1.6 billion-asset River Forest Bancorp, said lower interest rates and interest rate floor contracts helped $282 million-asset River Forest State Bank post first-quarter ROA of 3.18%.

The bank's return on assets has been above 2% for the past 10 to 15 years, Mr. Glickman said.

Three of River Forest Bancorp's nine Chicago-area banks were among the state's top small banks based on return on assets.

In addition to River Forest State Bank, the company's $321 millionasset Chicago-based Commercial National Bank, returned 2.21% on assets, and $313 million-asset Lincoln National Bank, Chicago, reported 2.07%.

All three of the banks had virtually no loan losses and made money on student loans they bought at a discount from the Resolution Trust Corp., Mr. Glickman said.

Another contributor to Illinois community banks' overall performance is the Midwest's stable economy, bankers said.

"I think banks are mirror images of the economies in which they do business," said Van Dukeman, president of $225 million-asset Bank Illinois, Champaign. "You have a robust economy in the Midwest."

The nearby main campus of the University of Illinois helps fuel the area's economy.

"We don't tend to have as many peaks and valleys," Mr. Dukeman said. "That helps your bank. I believe you're going to see it continue for some time."

Bank Illinois' first-quarter ROA was 2.57%, jumped from 1.46% in 1993 and 0.22% in 1992. Earnings suffered in 1992 because of bad loans and thin margins. The company's ROA is still getting a boost from income generated from the holding company's 1992 sale of a telephone billing processing company, Mr. Dukeman said.

Mr. Dukeman, who came on board as president in January, said the bank's new management has attempted to improve margins through pricing and it has emphasized credit quality. Despite small Illinois banks' overall solid performance, asset growth seems to be slowing. ff assets keep growing at the first quarter's 0.80%, banks will be hard pressed to repeat 1993's 9.71%.


Most profitable community banks, first-quarter '94 Return Total on assets Total in millions 1 First Bank of Oak Park 6.31% 137.2412 Cosmopolitan Bank and Trust, Chicago 5.65 97,5103 River Forest State Bank and Trust Co. 3.18 285,2614 First State Bank, Maple Park 2.86 63,9885 Sun Bank, Washington 2.77 24,3396 Bank of Illinois in Champaign 2.57 231,9367 Vermilion Valley Bank, Piper City 2.38 37.0178 Bank of Springfield 2.37 55.7369 First State Bank and Trust Co. of Park Ridge 2.37 181.12910 North Community Bank, Chicago 2.33 124.97011 Poplar Grove State Bank 2.29 30.728 12 First Bank and Trust Co, of Illinois, Palatine 2.28 102.73613 Commercial National Bank of Chicago 2.21 300.64214 Broadway Bank, Chicago 2.08 74.32515 Lincoln National Bank, Chicago 2.07 311.57416 National State Bank, Metropolis 2.06 59.80217 West Chicago State Bank 2.04 57.65116 United Community Bank, Chatham 2.04 68.68119 First Security Bank, Mackinaw 2.02 17.29320 Community Bank and Trust Co. of East Chicago 2.02 68.60721 Germantown Trust and Savings Bank, Breese 2.01 93.00922 First Bank North, Freeport 1.96 216.65423 Mlnonk State Bank 1.95 40.39324 First National Bank of Chrisman 1.94 28.80525 First National Bank of La Grange 1.94 133.178

A community bank is a bank with total assets of $2 billion or less that makes loans and accepts deposits, Also, the bank is either independently owned or owned by a community bank holding company (company's consolidated assets are $2 billion or less).

Source: Sheshunoff & Co,

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