American Banker’s John Reosti takes a deep dive into the analysis by CPG’s Emma Metzler and Trevor Fox on the top performing publicly traded community banks.
High interest rates and stubbornly persistent inflation made 2023 a tough year for community banks. Their travails were reflected in Capital Performance Group’s annual ranking of the top-100 publicly traded banks with assets under $2 billion.
Though the under $2 billion-asset cohort continued to enjoy pristine asset quality, the benefits of low-to-no charge-offs were outweighed by core deposit runoff alongside a slowdown in revenue growth. Though still solid, most bottom-line metrics failed to match 2022 levels, even among top-performing banks, according to Capital Performance Group, a Washington, D.C.-based financial services consulting firm.
To be sure, there were bright spots. “Despite challenges brought on by elevated rates and deposit outflows, the median net interest margin increased by nine basis points for the top 100,” Emma Metzler, a consultant and project manager at Capital Performance Group, wrote in an email to American Banker.
In general, though, profitability measures were down industrywide. For top performers, the best that could be said was that they managed the downside better than most. Return on average equity averaged 15.83% among the top 100 under $2 billion-asset public banks, a climbdown from 17.20% in 2022. The same held true for all 361 banks in the under $2 billion-asset cohort, with ROAE dropping a meaningful 125 basis points year over year.
Read the full article, including a link to the top 100 listings here.
