Sterling Bancorp Inc. retained its No. 1 position as the best-performing large U.S. community bank in 2018, bolstered by stellar earnings and cost controls.

While based in Southfield, Mich., most of Sterling Bancorp's 30 branches are in California, particularly the San Francisco metro area. It also has a presence in New York and Washington, in addition to its home state.

Sterling's banking subsidiary was founded in 1984, and its holding company was formed in 1994. The company crossed the $3 billion mark in the first quarter of 2018 and ended the year with $3.20 billion in assets.

Among the top 50 list, Sterling Bancorp reported the second-highest annual return on average tangible common equity, or ROATCE, at 29.19% and the fourth-best efficiency ratio at 34.83%. Despite the company's strong performance overall, Sterling's net interest margin of 3.95% was 1 basis point lower than the top-50 median and its 7.1% loan growth lagged the top-50 median by 2 percentage points.

In light of changes to the Federal Reserve Board's Small Bank Holding Company Policy Statement in 2018, the asset threshold for this community bank ranking was raised to $3 billion from $1 billion. In previous years, S&P Global Market Intelligence published two community bank rankings — one for institutions below $1 billion in assets and one for institutions with $1 billion to $10 billion in assets. This year, the rankings are split between community banks under $3 billion in assets and community banks with $3 billion to $10 billion in assets.

Birmingham, Ala.-based National Commerce Corp. took the No. 2 spot, thanks to its third-best net interest margin of 4.75% and its second-best loan growth rate of 53.8%. On Nov. 26, 2018, Winter Haven, Fla.-based CenterState Bank Corp. announced that it would acquire National Commerce.

Last year's No. 2 institution, Los Angeles-based RBB Bancorp, ended 2018 with $2.98 billion in total consolidated assets, falling just short of the new $3 billion asset threshold. However, the company's bank unit ranked No. 11 on this year's list of top community banks with less than $3 billion in assets.

Three banks in the top-50 list — No. 4-ranked Independent Bank Group Inc. in McKinney, Texas, No. 15-ranked First Merchants Corp. in Muncie, Ind. and No. 35-ranked Independent Bank Corp. in Rockland, Mass. — are set to cross the $10 billion asset mark as a result of pending or completed acquisitions since the end of 2018.

Texas had nine banks and thrifts in the top 50, more than any other state, followed by California with six institutions.

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