ICBA’s best-performing community banks of 2020

Best-performing banks

Independent Banker’s annual listing of America’s best-performing community banks shows that nimble thinking and an adherence to good old-fashioned customer service can bring success, whatever the circumstances.


What a year it was.
In 2020, community banks contended with a fast and furious Paycheck Protection Program lending boom and a glut of deposits as customers put their stimulus payments away for a rainy day. They dealt with lockdown orders, changes in consumers’ banking habits and rapid-fire adoption of technology to meet those needs. Yet community banks rose to the occasion. Independent Banker’s annual listing of America’s best-performing community banks shows that nimble thinking and an adherence to good old-fashioned customer service can bring success, whatever the circumstances.

best of the best

Less than $300 million

by William Atkinson

Less than $300 million
Rank Bank Name City State 3-yr average pre-tax ROA
The Philadelphia Trust Company Philadelphia PA 7.31
Brazos National Bank Richwood TX 5.53
Allied First Bank, SB Oswego IL 5.46
4 Central Bank of Kansas City Kansas City MO 5.13
5 First Federal Bank, A FSB Tuscaloosa AL 4.92
Independence Bank East Greenwich RI 3.77
7 Nebraska State Bank Oshkosh NE 3.69
8 First Colorado National Bank Paonia CO 3.66
9 Paramount Bank St Louis MO 3.57
10  First State Bank Elmore City OK 3.25
11 Fidelity Bank West Des Moines IA 3.17 
12 Neighbors Bank Columbia MO 3.11 
13  California Pacific Bank San Francisco CA 3.03
14  Cumberland Security Bank, Inc. Somerset KY 2.99
15 Douglas National Bank Douglas GA 2.95
16  Wyoming Bank & Trust Cheyenne WY 2.86
17 PrinsBank Prinsburg MN 2.82 
18  Sherburne State Bank Becker MN 2.81
19 North Valley Bank Thornton CO 2.77
20 Town and Country Bank Midwest Quincy IL 2.77
21  Bank of Montana Missoula MT 2.72
22 The Bank of Deerfield Deerfield WI 2.67
23  The Colorado Bank and Trust Company of La Junta La Junta CO 2.66
24 State Bank of Wheaton Wheaton MN 2.65
25 Kinmundy Bank Kinmundy IL 2.65
Blake Fiek

Blake Feik, president, North Valley Bank

Q&A

Blake Feik, president, North Valley Bank

Q: Describe your bank’s strategy for high performance.
A: As a smaller full-service commercial bank with state-of-the-art technologies, we pride ourselves on the ability to be more flexible in meeting our customers’ loan and depository needs. We make loans to a lot of good, and sometimes average, customers. Accordingly, we take calculated risks, but do not take undue credit or interest rate risks. By achieving this, we maximize yield to the bank with an orientation toward risk-reward. “Skin in the game” is [our] underwriting cornerstone.

#19

North Valley Bank
Thornton, Colo.

Assets: $216 million
3-year average
pre-tax ROA:
2.77%
nvbank.bank

Q: How does this philosophy play out in terms of your loan strategy?
A: We take time to get to know our borrowers, resulting in a customized loan structure and financing terms for many customers who probably would not get loan approvals with our competition.

Q: What role does employee compensation play?
A: We have a fairly aggressive deferred commission payout program for our bankers, which can be quite lucrative. All employees, including tellers, can earn an attractive annual bonus when the bank reaches and/or exceeds its budgeted net profit.

Q: How do you ensure efficiency throughout the bank?
A: We endeavor to streamline and keep our overhead down, and thus have an efficiency ratio of around 45%. We constantly keep our expenses in check and look for ways to save a dollar. We have no reliance on brokered third-party referral business, thus no middleman.


North Valley Bank team

From left to right: North Valley Bank’s Rob Holt, Denise Brown, Blake Feik and Krystal Gaskill.


Darren Winkler

Darren Winkler, president and CEO, Bank of Deerfield

3 MINUTES WITH…

Darren Winkler, president and CEO, Bank of Deerfield

The Bank of Deerfield was founded in 1887 by H.B. Fargo and was originally known as the H.B. Fargo Company. In 1909, the business name was formally changed to the Bank of Deerfield. It moved into its current location in 1980 and built another branch in 2005 to serve outlying community customers.

“We have a long history of taking a commonsense approach to community banking,” says president and CEO Darren Winkler. “Our customers trust us to proficiently evaluate their needs, then offer products and services accordingly.”

#22

Bank of Deerfield
Deerfield, Wis.

Assets: $176 million
3-year average
pre-tax ROA:
2.67%
bankofdeerfield.com

The community bank’s personal and trustworthy style of business is a long-term strategy. “We know that honest, efficient and straightforward service is the key to building long-term banking relationships within our community,” he says.

Looking to the future, the Bank of Deerfield’s primary goal is to continue to be a community bank that understands its place in the local market. “As banking evolves,” Winkler says, “our team will upgrade our products and technologies, while continuing to serve our customers in the same friendly, sincere and efficient way that we always have.”

 

“Our borrowers have a custom digital mortgage experience from the first minute they interact with Neighbors Bank.”
—Andrew Beverley, Neighbors Bank

 

Andrew Beverley

Andrew Beverley, CEO, Neighbors Bank

IN THEIR OWN WORDS

Andrew Beverley, CEO, Neighbors Bank

One of our keys to success has been focusing on our core business of mortgage loans. We originate mortgage loans in 49 states.

Technology is at the center of what we do. Our borrowers have a custom digital mortgage experience from the first minute they interact with Neighbors Bank. We have enjoyed a great partnership with our core banking provider, Nymbus, and we believe that modern technology is a competitive advantage for us.

#12

Neighbors Bank
Columbia, Mo.

Assets: $80 million
3-year average
pre-tax ROA:
3.11%
neighborsbank.com

We take pride in hiring great people and working in accordance with our values: be passionate and have fun, deliver results with integrity and enhance lives every day. Organizing the bank around our core values has been the most important key to our growth and success. However, it goes beyond just writing them down on paper. You have to live them as a leadership team and as an entire organization. When “enhancing lives” is your North Star, that translates into an easy and enjoyable homebuying process for customers.

We plan to keep building our mortgage division, while exploring new product offerings, in order to strengthen the bank. We will continue to keep our customer experience at the heart of everything we do.


best of the best

$300 million to $1 billion

by Ed Avis

$300 million to $1 billion
Rank Bank Name City State 3-yr average pre-tax ROA
One American Bank Sioux Falls SD 12.28
Willamette Valley Bank Salem OR 8.85
Bank of England England AR 8.04
4 FinWise Bank Murray UT 7.84
5 Magnolia Bank, Inc. Hodgenville KY 7.64
Stafford Savings Bank Stafford Springs CT 6.71
7 Apex Bank Camden TN 4.61
8 University Bank Ann Arbor MI 4.47
9 First Community Bank of Tennessee Shelbyville TN 4.41
10  FSNB, National Association Fort Sill OK 3.57
11 Pioneer Trust Bank, National Association Salem OR 3.43 
12 The Yellowstone Bank Laurel MT 3.35 
13  Peoples Bank Mendenhall MS 3.03
14  BankSouth Greensboro GA 3.00
15 HNB National Bank Hannibal MO 2.98
16  The Bank of Old Monroe Old Monroe MO 2.84
17 Citizens Bank of Las Cruces Las Cruces NM 2.60
18  First Bank Burkburnett TX 2.57
19 West Gate Bank Lincoln NE 2.54 
20 Presidential Bank, FSB Bethesda MD 2.52 
21  Citizens Bank Carthage TN 2.51
22 FNB South Alma GA 2.51 
23  Independence Bank Havre MT 2.49
24 AMG National Trust Bank Boulder CO 2.40
25 The First State Bank Louise TX 2.38
Jed Fanning

Jed Fanning, president and CEO, Citizens Bank of Las Cruces

Q&A

Jed Fanning, president and CEO, Citizens Bank of Las Cruces

Q: Why did Citizens Bank perform so well in 2020?
A: We have a core operating model that has served our bank for many years: quality loan growth, low-cost deposit growth, strong volume in home mortgage originations and disciplined expense control.

Q: What role did the PPP play?
A: Our team really rolled up their sleeves to do whatever it took to process the many applications that were coming in during a fairly narrow window of time. We did 950 PPP loans in the first round, and that helped those businesses and indirectly helped their employees. There were a lot of positive ripple effects of that program.

#17

Citizens Bank of Las Cruces
Las Cruces, N.M.

Assets: $762 million
3-year average
pre-tax ROA:
2.60%
citizenslc.com

Q: How about deposit growth?
A: Our deposits overall increased 24% in 2020, which is significantly above the 6% to 8% we experience in more normal years. We think this was because people were spending less, saving more and possibly delaying investment decisions because of the unknowns surrounding the pandemic.

Q: Any other keys to your success this past year?
A: I have often told our team that times like 2020 can either bring out the worst in people and organizations or bring out the best in people and organizations. And what I saw in spades is the best came out in our people individually and collectively. I saw that across the board in community banking.


Citizens Bank of Las Cruces

Citizens Bank of Las Cruces’ high school debit card program generates donations for local schools.


Stephen Ranzini

Stephen Ranzini, president and CEO, University Bank

#8

University Bank
Ann Arbor, Mich.

Assets: $552 million
3-year average
pre-tax ROA:
4.47%
university-bank.com

Q&A

Stephen Ranzini, president and CEO, University Bank

Q: Why is your bank successful?
A: We’re really good at mortgage subservicing. Our Google ratings are in the upper four stars and our competition is in the lower one star. We are Midwestern people who care about customer service. That business generates a lot of fee income; 85% of our income is fee income.

Q: Do you originate mortgages, too?
A: Yes, the subservicing business generates a huge amount of zero-cost escrow deposit money that we lend through mortgage origination. We are one of the largest VA [Department of Veterans Affairs] lenders in the U.S., and we are a leading faith-based lender.

Q: What was COVID-19’s impact?
A: The reaction of the Federal Reserve to the shutdown of the economy had a major impact on interest rates. That caused a capacity constraint in the mortgage industry, which caused margins to go up. The economics were so compelling that in March we switched to 100% securitization of all of the loans that we were originating.


Stafford Savings Bank

Stafford Savings Bank

“One of our popular services is the telephone banker, where you punch in ‘8’ to get your balance. This is ancient high technology, but many of our customers don’t have smartphones or computers.”
—F. Winfield Trice Jr., Stafford Savings Bank

 

3 MINUTES WITH…

F. Winfield Trice Jr., president and CEO, Stafford Savings Bank

F. Winfield Trice Jr. doesn’t attribute Stafford Savings Bank’s success to cutting-edge technology. Rather, he credits it to a focus on old-fashioned bank services.

#6

Stafford Savings Bank
Stafford Springs, Conn.

Assets: $340 million
3-year average
pre-tax ROA:
6.71%
staffordsavingsbank.com

“It’s more about what we’re not doing,” says Trice, president and CEO of the Connecticut community bank. “Stafford Savings is a very traditional mutual savings bank in the old-school model. We only originate residential mortgages for our own portfolio; we never sell, and we never buy. And our branches are only in the town of our origin, Stafford Springs. We don’t do business lending, we don’t do any indirect auto; no leasing, none of the fancy things.”

How does Stafford Savings Bank succeed without these things? One advantage is that, due to its founding in 1872, it’s grandfathered out of regulations that limit its ability to own common stocks, so it earns enough investment income to remain traditional.

“It gives us license to do exactly what our customer base wants,” Trice says. “One of our popular services is the telephone banker, where you punch in ‘8’ to get your balance. This is ancient high technology, but many of our customers don’t have smartphones or computers. Other banks would say ‘enough is enough’ and get rid of it, but we keep it.”


best of the best

More than $1 billion

By Katie Kuehner-Hebert

More than $1 billion
Rank Bank Name City State 3-yr average pre-tax ROA
NBKC Bank Kansas City MO 10.86 
Gateway First Bank Jenks OK 6.02 
Plains Commerce Bank Hoven SD 5.43
4 BNC National Bank Glendale AZ 3.64
5 Northpointe Bank Grand Rapids MI 3.56 
Metro City Bank Doraville GA 3.39
7 First Savings Bank Beresford SD 3.02
8 Sutton Bank Attica OH 2.86
9 Stearns Bank National Association St. Cloud MN 2.68 
10  First Savings Bank Jeffersonville IN 2.68
11 United Texas Bank Dallas TX 2.62
12 Central Bank Provo UT 2.59
13  Wallis Bank Wallis TX 2.58
14  Citizens National Bank of Texas Waxahachie TX 2.51
15 MVB Bank, Inc. Fairmont WV 2.48
16  Cross River Bank Fort Lee NJ 2.45
17 PCBB Walnut Creek CA 2.44 
18  Cache Valley Bank Logan UT 2.42
19 The Bank of Commerce Idaho Falls ID 2.42
20 Citizens First Bank The Villages FL 2.41
21  Timberland Bank Hoquiam WA 2.37
22 Bank of Utica Utica NY 2.36
23  Centennial Bank Conway AR 2.36 
24 Plumas Bank Quincy CA 2.34
25 Cedar Rapids Bank and Trust Company Cedar Rapids IA 2.29
Andrew Ryback

Andrew Ryback, president and CEO, Plumas Bank and Plumas Bancorp

3 MINUTES WITH…

Andrew Ryback, president and CEO, Plumas Bank and Plumas Bancorp

What makes Plumas Bank so profitable? In a nutshell: diversification.

The Quincy, Calif.-based community bank is diversified not only in the geography of each branch and its respective customer base, but also in its loan variety and sources of fee income, according to president and CEO Andrew Ryback. “We’re unique among California community banks in that 10% of our loan portfolio is in agriculture,” he says. “We also have an indirect auto lending portfolio, buying paper from car dealerships around northern California.”

#24

Plumas Bank
Quincy, Calif.

Assets: $1.2 billion
3-year average
pre-tax ROA:
2.34%
plumasbank.com

Plumas Bank also differs from many community banks in the region in that it doesn’t rely solely on commercial real estate lending, Ryback says. Instead, the bank is involved in Small Business Administration (SBA) 7(a) lending.

This should be lucrative in 2021, as the SBA is guaranteeing 90% of each loan, up from the typical 75%. Plus, it is waiving associated fees on the loans to encourage small business financing during the pandemic, and the government is making at least the first three loan payments.

In addition to gains on sales of the guaranteed portion of SBA loans and servicing fees on the portion it retains, Plumas Bank garners interchange revenue related to customer debit card usage, as well as service charges on retail and other business clients.

“All of this diversification provides growing and sustainable income streams,” Ryback says. “We want to make sure that when one of our sources of income is disrupted, such as tourism in some markets due to the pandemic or tariffs put on some ag products, we have other sources of income to generate profitability.”


Plumas Bank team

Staff at the Reno, Nev., office of Plumas Bank pose for the community bank’s holiday card.


Charles Williams

Charles Williams, president and CEO, Northpointe Bank

Q&A

Charles Williams, president and CEO, Northpointe Bank

Q: What are your keys to success?
A: While 2020 was an outstanding profitable year by any measure, for us, the most positive metric is the consistency of our performance in the last five or six years in different interest rate environments. This is key to being successful when you’re primarily in the consumer mortgage business space. The diversification of our business units provides strength for us. For example, when interest rates rise and mortgage volume slows down, servicing and the value of servicing increases. When interest rates fall, originations pick back up and that helps offset the slowdown in servicing.

#5

Northpointe Bank
Grand Rapids, Mich.

Assets: $3.7 billion
3-year average
pre-tax ROA:
3.56%
northpointe.com

Q: How does your nationwide deposit-gathering fit in?
A: We have one branch in Grand Rapids, Mich., so essentially we’re a virtual bank. We have a nationwide online platform for collecting deposits. Our deposit savings rates are among the best rates in America, something we’re able to offer because we don’t have the typical brick-and-mortar costs. We also link our home loans accounts to deposit accounts for our customers, which helps promote deeper customer relationships. Plus, we offer discounts if customers elect to have automatic payments, so we get better loan performance as well.

Q: How important is relationship building to Northpointe Bank?
A: I want to emphasize that people are at the center of everything we do. We build trust and lifelong relationships with both our employees and the customers we serve. Our success is based on our employees who are committed to treating every customer like [they’re] their only customer and we treat every employee like [they’re] our only employee.


Gateway First Bank

Gateway First Bank


#2

Gateway First Bank
Jenks, Okla.

Assets: $1.9 billion
3-year average
pre-tax ROA:
6.02%
gatewayfirst.com

3 FACTS ABOUT…

Gateway First Bank

  1. As many homeowners took advantage of lower interest rates and refinanced their mortgages, Gateway First Bank logged its best year of residential mortgage production yet. The community bank funded more than $1 billion in residential mortgage loans for six of the 12 months of 2020, including an all-time monthly record of $1.1 billion in October. Gateway First Bank funded more than $11.3 billion in mortgage loans overall, beating its previous record year of $7.7 billion in 2019.
  2. Despite the pandemic, the bank was able to maintain its pace by transitioning its 1,400 employees to remote work within two weeks.
  3. Gateway First Bank’s continued growth was also made possible by the opening of 17 new mortgage centers, bringing its year-end number of centers to 163. Another eight were expected to open during the first quarter of 2021. The bank is now in 42 states and Washington, D.C.

How we compiled these rankings

ICBA compiled this year’s rankings with the aim of recognizing community banks that are consistent high performers. Using FDIC data, we took into account pre-tax return-on-assets (ROA) figures from the past three years, with the most recent year weighted at 3x, second most recent year at 2x and third most recent year at 1x. We then divided the community banks into three broad segments based on asset size and ranked each segment based on our three-year weighted average ROA. A bank must have a rating of C or higher by Kroll Bond Ratings (formerly LACE) to be considered for ranking.


William Atkinson is a writer in Illinois. Ed Avis is a writer in Illinois. Katie Kuehner-Hebert is a writer in California.

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