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Bank Director’s annual ranking of the 300 largest public banks finds niche and community institutions tend to be the best.
Every year that Bank Director publishes RankingBanking, an analysis of the largest 300 publicly traded banks by performance, I find myself marveling at the sheer number of community banks that top the list. This year was no exception.
Although there are some banks that have achieved successful niche business models over the years — The Bancorp and Bank OZK are among them — what RankingBanking proves is that the community bank model is far from dead. In fact, it’s thriving. Take a look at Five Star Bancorp in California and Great Southern Bancorp in Missouri.
As Bank Director’s Vice President of Editorial and Research Emily McCormick describes in the report, 19 of the top 25 banks in the country last year had less than $10 billion in assets.
Kara Baldwin, a partner who leads the financial services audit group at Crowe LLP, which sponsors this report, says some of that performance has to do with a loyal customer base. “When something goes wrong, you can have a discussion with someone who actually knows you personally,” she says. “You’re not getting sent to a call center far off. And for a lot of these commercial deposits, that’s what they want.” Among the largest 300 banks, the smallest institution examined this year had $2 billion in assets.
RankingBanking is compiled by Piper Sandler & Co. with year-end 2023 data from S&P Global Market Intelligence. It uses four metrics to gauge the performance of public commercial and savings banks as defined by S&P. The metrics are core return on average assets and core return on average equity, tangible common equity to tangible assets, and nonperforming assets to loans and other real estate owned. Each bank is ranked on each metric, and the sum of the rankings produces a final score. This year, total shareholder return was excluded because some over-the-counter banks are thinly traded, making the metric unfair as a comparison. Management teams also have a harder time influencing that figure.
In 2023, bankers who were wise about balance sheet management and dominated their markets or niches did better than others. That’s not to say that all small banks outperform larger banks — certainly not. But small overachievers filled the top of the ranks. In these pages, we tell some of their stories.
Click here to access the complete RankingBanking study.
| The ranking identifies the top 25 U.S. banks, and ranks all 300 by asset size: |
|---|
| The Top 25 Banks |
| $50 Billion and Above |
| $5 Billion to $50 Billion |
| Less Than $5 Billion |
