During the pre-crisis boom years, the nation’s best-performing community banks generally hailed from locales such as Florida, Georgia, Arizona and Nevada — warm-weather states where new-home construction boomed and populations soared.

After the housing market tanked, historically slower-growth areas like the Northeast served as home to the star performers among smaller banks.

But now, geography hardly seems to matter when it comes to the performance of publicly traded community banks.

Just look at Sandler O’Neill’s annual roster of small-bank all-stars. The 2015 class is spread out among 19 states covering every corner of the country. By contrast, just 12 states were represented in the investment bank’s 2012 report, and most were in New England and the mid-Atlantic, where the impact of the financial crisis was less severe.

This year’s group is a diverse bunch in other ways as well. The banks range in asset size from $493 million – Bank of the James Financial Group in Lynchburg, Va. – to nearly $18 billion – Texas Capital Bancshares in Dallas. Top performers include a mix of de novos such as Stonegate Bank in Pompano Beach, Fla., and ServisFirst Bancshares in Birmingham, Ala., and old-timers like National Penn Bancshares in Allentown, Pa., and Peapack-Gladstone Financial in Bedminster, N.J. There’s even an Internet-only player, BofI Holding in San Diego.

The roster is the most diverse since Sandler started compiling its annual small-bank all-star report more than a decade ago, said Mark Fitzgibbon, the firm’s director of research. With the economy performing steadily, if unspectacularly, in most areas of the country, he said banks in certain markets no longer have a clear advantage over banks in others. The best banks, he said, are simply those with the best business plans.

“We are back to a state of normalcy for the industry where the cream is rising to the top,” Fitzgibbon added.

Of course, normalcy is all relative when net interest margins continue to be squeezed by rock-bottom interest rates, and rising regulatory costs are eating into potential profits. Sandler’s 34 all-star banks had a median return on equity of 10.1% in the second quarter — respectable, to be sure, but a far cry from the days when a 15% ROE was the gold standard.

To come up with its list, Sandler examined growth trends for loans, deposits, earnings per share and return on average equity. It also weighed various credit-quality metrics for a one-year period that ended June 30. Banks needed a market capitalization of $25 million to $2.5 billion to be considered.

No matter the business model, what the best out there have in common is a sound growth strategy. The median loan growth at the all-star banks was 19% for the 12 months that ended June 30, compared to a 9.2% median for all publicly traded banks on major exchanges. Median deposit growth for the all-stars was 14.3%, versus a 6.5% median for others.

Some, like the $5.4 billion-asset Flushing Financial in New York and the $8.2 billion-asset United Community Banks in Blairsville, Ga., are moving into new business lines to fuel growth.

Flushing, historically been a multifamily lender, has been bulking up in commercial-and-industrial lending, funded in part by its deposit-gathering, Internet-only unit, iGobanking.com. United Community was largely a construction lender before the real estate bust, but over the last couple of years it has diversified, getting into indirect automobile and Small Business Administration lending. Construction loans now make up just 6% of United Community’s loan book, compared with nearly 40% pre-crisis.

Banks that aren’t growing organically are buying smaller banks, hiring lending teams away from their rivals or both, as is the case with the $6.5 billion-asset Pinnacle Financial Partners in Nashville.

Among the most acquisitive banks has been Stonegate. The decade-old bank, a newcomer to Sandler’s all-star team, more than doubled its assets, to $2.3 billion, by buying three small banks within 18 months. At June 30, its total loans were up nearly 50% from a year earlier and its earnings per share climbed 77%.

“Florida is a market where there’s been a lot of turbulence and a lot of opportunity, and banks like Stonegate have been able to capitalize on that to improve their own performance,” Fitzgibbon said.

Sandler has a “hold” rating on Stonegate’s stock, but its analysts believe many of the other stocks in this year’s list are undervalued. Of the 25 all-star banks it covers, Sandler has “buy” ratings on 15, including United Community, National Penn, Peapack-Gladstone, Pinnacle and ServisFirst Bancshares in Birmingham, Ala. (National Penn recently announced plans to sell itself to BB&T).

United Community, which returned to the rankings after an 11-year absence, trades below peers in its markets even though its 1.01% return on assets is in line with them, said Brad Milsaps, another Sandler analyst.

United Community may have fallen off of investors’ radar in recent years as it battled credit troubles and diluted the value of its shares by raising hundreds of millions of dollars from private-equity investors, Milsaps said. Concerns could also exist about the company’s soon crossing the $10 billion-asset mark, which would subject it to more regulatory scrutiny. United Community has completed two deals since July and continues to eye other opportunities both inside and outside of its markets.

“It’s hard for any bank to really understand what’s needed in terms of personnel and systems when you pass the $10 billion mark,” Milsaps said. United “spent a lot of time dealing with the government during the crisis,” which provides it with an edge on risk management issues.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.