With earnings season coming to a close, it is safe to say that community banks, much like their larger peers, had a very strong second quarter. Among major exchange-traded community banks, median year-over-year operating revenue growth came to 9.6% in the second quarter, compared to 7.6% for the quarter ended June 30, 2016.
The largest community banks — those with between $5 billion and $10 billion in assets — and those between $1 billion and $5 billion in assets posted the highest median year-over-year operating revenue growth at 9.7%.
In the category of largest community banks, Irvine, Calif.-based Pacific Premier Bancorp Inc. reported the highest operating revenue growth at 68.6% year over year, primarily as a result of its acquisition of Paso Robles, Calif.-based Heritage Oaks Bancorp on Jan. 4. On Aug. 9, the company agreed to acquire another California bank, Irvine-based Plaza Bancorp.
A handful of companies in this category reported a year-over-year decline in operating revenue, including Seattle-based HomeStreet Inc., which reported the largest decline at 13.3%. The company's revenue took a hit primarily because of a 21% drop in noninterest income for the quarter, according to SNL data.
Bar Harbor, Maine-based Bar Harbor Bankshares reported the highest operating revenue growth among all community banks at 128.4% year over year, largely due to its acquisition of Newport, N.H.-based Lake Sunapee Bank Group on Jan. 13.
On the other hand, Riverside, Calif.-based Provident Financial Holdings Inc. reported a 17.2% year-over-year decline in operating revenue for the second quarter, the largest decline among community banks with $1 billion to $5 billion in assets. The drop was primarily due to a decrease in noninterest income, which was down as a result of a decrease in gain-on-sale from loans and a higher net loss on the sale and operations of real estate owned during the second quarter, according to the company's July 26 earnings release.
Among the three asset groups, the smallest community banks, those with less than $1 billion in assets, reported the lowest operating revenue growth at 7.8% and the highest efficiency ratio at 70.61% for the three months ended June 30.
Click here to access an Excel template that provides data on earnings at public banks and thrifts.
Click here to view a webinar on SNL's Peer Analytics tool to learn how to run a custom peer analysis for SNL-covered public companies.