BRENTWOOD, TENN., July 30, 2015 – Capital One Financial Corp. (NYSE: COF) ranked first among the 20 publicly-traded banks with assets of more than $50 billion in Bank Director magazine’s annual Bank Performance Scorecard. Bank of the Ozarks Inc. (NASDAQ: OZRK) and Preferred Bank (NASDAQ: PFBC) ranked first in the categories of assets of between $5 billion and $50 billion and $1 billion and $5 billion respectively.
Bank Director, a leading resource for senior executives and directors of financial institutions, published the 2015 Bank Performance Scorecard, a ranking of the 300 largest publicly traded banks based on 2014 calendar year data, in its 3rd quarter issue. The annual ranking finds that the top performers were very successful in growing top line revenue last year, and have highly differentiated strategies that give these banks a competitive edge.
“Superior financial performance in the banking industry is often determined by having a strategy that differentiates one bank against its competitors in a meaningful way, and then doing a great job of executing that strategy,” says Bank Director Editor Jack Milligan. “The three winners in this year’s ranking distinguished themselves in both regards.”
Each year, the Bank Performance Scorecard ranks banks traded on the NASDAQ OMX and NYSE exchanges, dividing them into three categories: Big banks, with more than $50 billion in assets; mid-sized banks, between $5 billion and $50 billion in assets; and community banks, between $1 billion and $5 billion in assets.
Five key metrics are used to evaluate bank performance: core return on average equity (ROAE) and core return on average assets (ROAA), to measure profitability; the ratio of tangible common equity (TCE) to tangible assets, to measure capital strength; and credit quality, gauged through the ratio of nonperforming assets to total loans and real estate owned, and the ratio of net charge-offs to average loans. While the Scorecard has a slight bias towards profitability, banks that rank highly tend to do well in all of the metrics.
“Our ranking is not a predictive tool for stock valuations,” adds Milligan. “Instead, it identifies the banks that have strong fundamentals across three critical areas – profitability, capitalization and asset quality. To me, these are strong, well balanced banks that are built to last.”
The winners of the 2015 Bank Performance Scorecard are:
Capital One Financial Corp., headquartered in McLean, Virginia, tops the ranking of big banks for the second year in a row. The company rated highly on profitability metrics, with an ROAA of 1.53 and an ROAE of 10.33, and capital adequacy, with a TCE ratio of 9.82. Capital One managed to increase net income, despite having flat revenue growth compared to 2013. Capital One benefited from the high profitability of a substantial credit card operation and the stable funding of a regional banking franchise. The company bought back 19 million shares of its common stock in 2014, which had a positive impact on its ROAE. KeyCorp (NYSE: KEY), of Cleveland, ranked second, and rated highest for capital adequacy, with a TCE ratio of 9.87. In third place, U.S. Bancorp (NYSE: USB), of Minneapolis, topped the profitability metrics with a 1.55 ROAA and 13.53 ROAE. Wells Fargo & Co. (NYSE: WFC) and Comerica Inc. (NYSE: CMA) round out the top five.
Bank of the Ozarks Inc., based in Little Rock, Arkansas, ranks first among mid-sized banks. Bank of the Ozarks consistently ranks highly in the Scorecard, and topped the community bank category in 2013 and 2014. Bank of the Ozarks grew non-purchased loans and leases by 51 percent last year, which contributed to its strong profitability ranking, with an ROAA of 2.13 and ROAE of 15.97. The company, which combines an ambitious acquisition strategy and a nationwide commercial real estate lending business, is profiled in the 3rd quarter issue of Bank Director. First Financial Bankshares Inc. (NASDAQ: FFIN), headquartered in Abilene, Texas, placed second this year after topping the ranking last year for banks of its size. Signature Bank (NASDAQ: SBNY), BofI Holding Inc. (NASDAQ: BOFI) and CVB Financial Corp. (NASDAQ: CVBF) close out the top five.
Preferred Bank, of Los Angeles, placed first in the community bank category, and posted strong loan growth in 2014. Other community banks ranking in the top five include: Bank Financial Corp. (NASDAQ: BFIN), of Burr Ridge, Illinois; First NBC Bank Holding Co. (NASDAQ: FNBC), of New Orleans; German American Bancorp Inc. (NASDAQ: GABC), of Jasper, Indiana; and Alerus Financial Corp. (OTC: ALRS), of Grand Forks, North Dakota.
Sandler O’Neill + Partners LLP constructed the rankings, using data from SNL Financial LLC.
ABOUT BANK DIRECTOR
Since 1991, Bank Director has served as a leading information resource for the directors and officers of financial institutions. Through its quarterly Bank Director magazine, executive-level research, annual conferences, and its website, BankDirector.com, Bank Director reaches the leaders of the institutions that comprise America’s banking industry. Bank Director is headquartered in Brentwood, Tennessee.
Source: Bank Director magazine