S&P Global Market Intelligence has released its annual rankings of 2019’s best-performing banks in three categories: community banks with assets between $3 billion and $10 billion, community banks with assets less than $3 billion, and top-performing credit unions.
Los Angeles-based Preferred Bank topped S&P Global Market Intelligence's ranking of best-performing large U.S. community banks in 2019. The company outperformed the industry median in all six of the ranking metrics analyzed. The bank had the lowest efficiency ratio among the top 50 at 32.69%, the second-lowest adjusted Texas ratio, and third-best return on average tangible common equity before tax. Preferred Bank operates 12 branches in California and one in New York.
Central Bank of Kansas City established almost 70 years ago, topped S&P Global Market Intelligence's ranking of the top 100 U.S. community banks under $3 billion in assets. The Missouri-based bank is certified as a community development financial institution that lends to low-income communities in projects across Illinois, Kansas, and Missouri. Last year, loans at Central Bank of Kansas City jumped 37.6% due to a surge in commercial and industrial and multifamily loans.
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 Dec. 31, 2019.
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.
Byron Center, Mich.-based Lake Michigan CU, was named the top-performing credit union. The institution outperformed the industry median in all five ranking metrics even as it's net charge-off ratio increased 2 basis points to 0.05% in 2019, and its delinquency ratio rose 4 basis points to 0.14%.
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, 2019.