ABA Banking Journal - June 2008 - (Page 32)

TOPCOMMUNITYBANKS construction and land development loans on their books. With the exception of Scorps under $100 million, CLD loans made up twice as much of the loan portfolio of top performers relative to the rest of the institutions analyzed. This gap was greatest among non-S corps between $100 million and $3 billion. Among the top 25 institutions in this group, CLD loans accounted for 38% of total loans, compared to 17% among all non-S corps in this asset tier. The institutions that were able to successfully implement this strategy appear to have been those who handled a mix of residential and commercial construction loans and who were experienced with construction lending. America West Bank, Layton, Utah (#5 among S-corps between $100 million and $3 billion) was founded in 2000 by a group of local businessmen that were familiar with the needs of construction businesses and their owners. CLD loans accounted for 89% of the bank’s loans in 2007, compared to 70% in 2006. 3. A focus on agribusiness Rising commodity prices, including grains and corn, led to a boom in the agri- culture industry during 2007, which proved to be a boon for lenders who focused on this industry. This was most evident among institutions with assets of less than $100 million. For example, agricultural production loans represented 14% of loans made by the top 25 non-S corps of this size, compared to 7% of loans made by other small non-S institutions. Agricultural production loans and farm loans combined accounted for over 30% of the loan portfolio at 20 of the 50 top performers under $100 million. A full 95% of loans made by Nebraska State Bank, Oshkosh, Neb. (#22 among Scorps less than $100 million), fell into one of these two categories. Nebraska State is the largest lender of Farm Service Agency guaranteed loans in the Midwest. The bank also makes direct loans to businesses in the agriculture industry for equipment, livestock, and land. Other large agricultural lenders among our top performers include First National Bank, Elkhart, Kan. (#24 among non-S corps less than $100 million), at which 60% of loans were either agricultural production loans or farm loans, and Bank of Paxton, Neb. (#3 among non-S corps less than $100 million), at which 58% of loans fell into these two categories. An additional 25% of loans at Bank of Paxton were C&I loans. The bank also benefited from a gain-on-sale that increased noninterest income from $18 thousand to $420 thousand and the termination of a C&D order that restricted the bank’s lending activities for six months. Looking ahead Community banks will continue to realign their strategies to adapt to everchanging market conditions. Banks will increase their focus on industries like agriculture that are performing better than the market as a whole. Lending will also continue to shift away from the residential sector, which for some banks and thrifts will involve a move away from CLD lending as losses on these loans begin to mount. Finally, we expect that banks will continue to restructure and to move out of businesses and/or markets that are not aligned with core strategic goals in order to better focus their resources in these more challenging times. BJ S-corp banks and thrifts less than $100 million in assets 2008 2007 rank rank Institution Total assets (000) 2007 ROAE 2007 ROAA Asset growth rate Loans/ deposits Noninterest Efficiency inc/total ratio NPLs/tot rev (FTE) loans Leverage ratio 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 133 1 80 199 2 4 3 624 7 259 22 17 23 172 18 10 21 14 30 63 5 25 66 31 36 Lone Star State Bank, Lone Star, TX, bank Citadel Bank, Colorado Springs, CO, bank Tri-State Bank & Trust, Haughton, LA, bank First Illinois Bank, East Saint Louis, IL, bank Bank of Dade, Trenton, GA, bank Wilburton State Bank, Wilburton, OK, bank First National Bank, Stigler, OK, bank Peoples Bank, Willacoochee, GA, bank Bank of Baker, Baker, MT, bank Priority Bank, Ozark, AR, savings bank Community Bank, Longview, TX, bank Farmers & Merchants Bank, Kendall, WI, bank First National Bank, Trinity, TX, bank ACB Bank, Cherokee, OK, bank National Bank, Andrews, TX, bank Grand Timber Bank, McGregor, MN, bank Bank Northwest, Hamilton, MO, bank Fife Commercial Bank, Fife, WA, bank Oklahoma State Bank, Buffalo, OK, bank Citizens State Bank, Grainfield, KS, bank TriCentury Bank, Simpson, KS, bank Nebraska State Bank, Oshkosh, NE, bank Justin State Bank, Justin, TX, bank Town & Country Bank of Missouri, La Grange, MO, bank Lusk State Bank, Lusk, WY, bank Source: SNL Financial LC Data as of Dec. 31, 2007 $30,063 92,306 31,588 46,173 85,605 57,342 86,362 57,386 71,649 46,604 88,464 47,810 44,452 48,658 92,491 52,470 87,772 85,265 40,538 10,326 4,484 35,341 67,568 26,418 36,242 62.68% 46.80 46.18 46.05 42.30 40.54 39.68 39.56 39.53 35.15 34.63 33.88 33.32 32.03 31.96 31.69 30.89 30.59 30.45 30.34 30.34 30.34 30.23 30.07 30.03 6.23% 3.20 7.02 3.99 2.79 2.60 2.47 4.58 3.73 2.43 2.42 2.92 2.71 2.17 2.88 2.96 2.28 2.48 2.22 3.10 3.01 2.83 3.23 2.48 2.57 -18.06% 41.73 -9.44 10.48 12.63 8.28 5.34 8.77 5.77 -1.06 23.80 3.18 4.83 7.78 10.94 4.92 9.44 -2.45 6.50 21.74 -16.22 2.12 12.70 1.01 6.82 97.85% 30.38 27.04 21.96 64.67 54.97 48.25 57.06 63.19 176.71 104.50 114.44 41.14 89.98 57.05 90.55 90.24 102.06 49.82 68.50 35.12 84.21 87.92 90.02 76.94 49.01% 25.63 46.91 19.79 12.58 16.53 18.60 52.81 4.90 43.23 21.50 12.33 22.25 12.16 30.46 9.92 18.73 6.63 17.71 3.21 92.80 35.45 13.81 17.24 7.48 32.43% 51.17 25.51 70.56 50.57 48.56 48.90 40.46 33.75 62.50 63.71 41.11 54.17 73.05 61.72 40.67 51.35 52.17 55.57 48.93 89.29 54.68 54.18 46.16 53.45 0.00% 0.00 0.00 0.00 1.03 0.23 0.13 1.25 0.02 1.09 0.00 0.77 1.16 1.20 0.00 3.75 0.35 0.00 0.00 0.00 1.56 0.12 0.11 0.00 0.72 10.32% 6.74 15.50 9.54 7.13 6.03 7.16 14.31 10.00 6.42 7.10 8.43 8.32 8.20 9.39 8.86 7.08 8.28 7.22 8.85 10.01 10.11 8.67 8.93 8.22 32 JUNE 2008/ABA BANKING JOURNAL

Table of Contents Feed for the Digital Edition of ABA Banking Journal - June 2008

ABA Banking Journal - June 2008 Contents Editor’s Column Do Fee-based Services Have an Edge? Snapshot: Net Interest Margins Vary Sharply with Size 100th Anniversary: Then & Now Letters ABA Resources ABA Chairman’s Position "What? No Annual Surprise Bonus?" Pass the Aspirin Cover Story: Top Community Banks: How They Did... ...And How They Did It Charter Bank First East Side Savings Bank Mackinac Financial Corp. The Peoples Bank Managing the E-mail Monster In Brief Handling PEPs in the Age of "L'affaire Spitzer" Mailbox Banker’s Mart To Advertise/Index of Advertisers The Economy

ABA Banking Journal - June 2008

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