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Missouri community banks don't compromise on profits in Q2

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Missouri community banks don't compromise on profits in Q2

Missouri's community banks and thrifts posted profits well ahead of their peers in both the Midwest and across the U.S. in the second quarter.

Among Missouri-based banks and thrifts with less than $10 billion in assets, the median return on average equity was 11.16%, down 36 basis points year over year, but well ahead of the Midwest median of 9.72% and the U.S. median of 9.59%. Missouri banks' 3.85% median net interest margin was 8 basis points higher than the Midwest median and 2 basis points higher than the U.S. median.

Loan and deposit growth at Missouri banks largely kept pace with the rest of the country. Deposits grew by a median 3.4% in the state, higher than the Midwest's 2.8% and equal to the national median. Loans meanwhile, grew by a median 4.9%, compared to 4.5% and 5.0% for the Midwest and U.S., respectively.

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Clayton-based Enterprise Bank & Trust, Missouri's largest community bank under $10 billion in assets, saw loans and deposits grow much faster than the state medians for the year ended June 30, helped by M&A activity. On March 8, parent Enterprise Financial Services Corp. completed its acquisition of Los Alamos, N.M.-based Trinity Capital Corp. and its subsidiary, Los Alamos National Bank. At the end of 2018, Los Alamos National Bank reported $1.25 billion in assets.

Earlier in 2019, Enterprise Financial took the No. 26 spot in S&P Global Market Intelligence's annual large community bank ranking.

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Bank deal activity in Missouri in 2019 has largely kept pace with that of 2018, with seven whole-bank deals with a Missouri-based target announced through Sept. 25, compared to 11 in all of 2018.

On July 31, Pine Bluff, Ark.-based Simmons First National Corp. announced it would acquire Columbia-based Landrum Co., the holding company for Landmark Bank, Missouri's fourth-largest community bank, for $447.5 million. This was Simmons First's second Missouri acquisition announced since November 2018, when the company revealed plans to buy Frontenac-based Reliance Bancshares Inc.

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Missouri is seeing more bank branch closures than openings as banking continues to go digital. During the second quarter, eight branches were closed, and seven were opened. Over the last 12 months to June 30, 40 branches were closed, while only 29 were opened.

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Click here for a spreadsheet containing second-quarter financial information for Missouri banks and thrifts.