trending Market Intelligence /marketintelligence/en/news-insights/trending/4pzxhqufqac0g0ezsiwsxa2 content esgSubNav
In This List

Margins up, profitability down as community banks begin reporting Q4'17 earnings

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


Margins up, profitability down as community banks begin reporting Q4'17 earnings

Banks and thrifts below $10 billion in assets started the fourth-quarter 2017 earnings season reporting improved net interest margins but sharp year-over-year declines in profitability, at least partially due to short-term pain caused by the newly enacted corporate tax reform.

Among the 180 community banks that reported calendar fourth-quarter results as of Jan. 26, the median return on average assets was 0.61%, down from 0.96% in the final quarter of 2016. The median net interest margin, however, gained 9 basis points to 3.67%, while the median efficiency ratio fell 99 basis points to 60.53%.

Among banks with less than $1 billion in assets, Mountlake Terrace, Wash.-based FS Bancorp Inc. reported the highest net interest margin at 4.72%, up from 4.66% in the year-ago quarter. Of the 33 banks and thrifts in this category, only nine reported year-over-year declines in net interest margin. The median ROAA for the category was 0.53%, down from 0.88% in the same quarter in 2016.

SNL Image

Dallas-based Triumph Bancorp Inc. reported the highest net interest margin among banks between $1 billion and $5 billion in assets.

Toano, Va.-based C&F Financial Corp. reported a net interest margin of 5.86%, the second-highest in the category, but that was down from 6.23% in the fourth quarter of 2016. The bank also reported a higher efficiency ratio and a negative ROAA for the quarter. In the company's earnings release, President Tom Cherry said while the company's earnings were negatively impacted by corporate tax reform, it expects to benefit from a lower tax rate going forward.

Over three-fourths of the banks in the category reported lower ROAAs compared to the last quarter of 2016.

SNL Image

For the biggest banks in the analysis, those with between $5 billion and $10 billion in assets, Tupelo, Miss.-based Renasant Corp. reported the highest net interest margin at 4.33%, while Santa Rosa, Calif.-based Luther Burbank Corp. reported the lowest at 2.05%.

The median net interest margin was 3.61%, up from 3.45% in a year earlier, while the median ROAA for the category fell by 30 basis points year over year to 0.74%.

SNL Image

SNL Image

Did you enjoy this analysis? Click here to set up real-time alerts for data-driven articles on the U.S. financial sector.

Click here to access an Excel template that provides data on earnings at public banks and thrifts.

Click here to view a webinar on the Peer Analytics tool and to learn how to run a custom peer analysis for S&P Global Market Intelligence-covered public companies.