Banking's Top Performers 2010

January 31, 2011

By Vanessa Mambrino, consultant, and Nick Robin, business analyst, Captial Performance Group LLC, Washington, D.C.

By the end of 2009, there was only one question on the minds of bankers: Is it over yet? By "it," of course, we mean the recession, the public anger, the govern- ment bailouts, the mounting loan delin- quencies, and the skittish capital markets. Indeed, there are signs that the worst is behind us- capital markets have stabilized, some sectors of the economy have started to recover, trading and servicing revenues have begun to rebound, and loan loss provisions have declined.

There are also less encouraging signs. Only 65 of the 639 institutions that participated in TARP's Capital Purchase Program have repaid these funds. In addi- tion, more than one in four banks remains unprofit- able, according to the FDIC. Home prices continue to decline, though at a less precipitous pace. The unem- ployment rate continues to move upwards in most states. Net charge-offs continue to rise.

So, is it over yet? This year's top performing public banks and thrifts might respond to that question in the affirmative. These 25 institutions either began 2009 in an enviably strong position-like No. 3 Westamerica Bancorp or No. 8 Bank of Hawaii Corp., (no strangers to our top group)-or were able to quickly recover their footing, like Wells Fargo & Company (No. 18; up from No. 66 the previous year). All of the top 25 benefited from finding short-term opportunities in 2009 that com- plimented long-term strategic goals.

Part One of the 18th annual ABA Banking Journal performance rankings reviews the financial results and strategies of the banks and thrifts over $3 billion in assets. The article divides these institutions into two groups: the top 25 publicly traded institutions and the top 10 private and foreign-owned institutions. Part Two of our rankings, appearing in June, will highlight the top performing community banks and thrifts of 2009.