Apr. 06 2018 — S&P Global Market Intelligence has released its annual rankings of 2017’s best-performing banks in three categories: community banks with assets between $1 billion and $10 billion, community banks with assets less than $1 billion, and top-performing credit unions.
Southfield, Mich.-based Sterling Bancorp Inc. earned the top place among the best-performing community banks with assets between $1 billion and $10 billion. Sterling's loan portfolio increased by more than 36% during 2017, helped by a 38% surge in one- to four-family loans. The thrift was highly profitable as well, posting a 37.85% return before tax on average tangible common equity and a 4.14% net interest margin for 2017. Founded in 1994, Sterling Bancorp operates 26 branches across California, Michigan, and New York.
In the category of best-performing community banks with assets under $1 billion, Arizona's Metro Phoenix Bank took the No. 1 spot after reporting a 23.39% pretax return on average tangible common equity, strong loan growth and a 5.90% net interest margin. Founded in 2007, Metro Phoenix focuses on lending to businesses and real estate professionals. At the end of 2017, nonfarm, nonresidential commercial real estate loans accounted for 62.06% of its total loans, while commercial-and-industrial loans accounted for another 18.80%.
S&P Global Market Intelligence ranked the best-performing community banks using six core financial performance metrics that focus on profitability, asset quality, and growth for the 12-month period ended December 31, 2017.
Community banks were defined as institutions with up to $10 billion in assets. In order for a bank to be eligible for the rankings, at least one-third of its balance sheet must be composed of loans, less than half of which could be attributable to credit card lending. Eligible banks had to be well-capitalized according to regulatory standards and could not have a majority of revenue derived from nontraditional banking activities.
Appleton, Wis.-based Fox Communities CU was named the top-performing credit union. Last year, 81-year-old Fox Communities merged with two different Green Bay, Wis.-based credit unions — Horizon Community CU and Harbor CU — which helped the credit union post 17.6% membership growth in 2017 and 21.4% market growth. Fox Communities finished 2017 with 100,113 members and $1.52 billion in assets.
S&P Global Market Intelligence ranked the nation's credit unions using five core financial performance metrics: member growth, market growth, operating expense as a percentage of operating revenue, net charge-offs as a percentage of average loans, and delinquent loans as a percentage of total loans. To be eligible for the ranking, a credit union had to report more than $500 million in total assets and a net worth ratio of at least 7.0% as of Dec. 31, 2017.
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