Our ranking assesses the performance of four groups of community financial institutions, defined by size and corporate structure:

1. Non-subchapter S commercial banks, thrifts, and bank holding companies with consolidated total assets less than $100 million;

2. Non-subchapter S commercial banks, thrifts, and bank holding companies with consolidated total assets between $100 million and $3 billion;

3. Subchapter S commercial banks, thrifts, and bank holding companies with consolidated total assets less than $100 million; and

4. Subchapter S commercial banks, thrifts, and bank holding companies with consolidated total assets between $100 million and $3 billion.

All rankings are based on consolidated statistics for the highest regulatory reporting level available for each institution. Where consolidated statistics were not available but data was reported for a subsidiary that accounted for at least 90% of a holding company’s assets, we used subsidiary data.

The rankings focused on institutions that offered traditional banking services; as a result, we have excluded from the analysis bankers’ banks, special purpose industrial loan companies and nondepository trusts, as well as institutions with less than 10% of their assets in loans, less than 10% of their liabilities in deposits, or over 70% of their loans in credit card receivables.  Companies that were not in operation for the full year also were excluded.

Within the four groups identified, institutions were ranked on their return on average equity (ROAE) for 2010. The 25 institutions with the highest ROAE in each category were selected as the top performers. Data was obtained from Highline Financial, LLC this year, as opposed to SNL Financial, LC as in years past, and reflects operations for the year ending December 31, 2010. Due to this new data source, we have rerun last year’s rankings using Highline data to provide accurate year-over-year comparisons. As a result, rankings have changed in certain cases due to the use of restated data. In cases where certain ratios were not available from Highline but the component data had been reported by the institutions, these ratios were calculated.


Note on the Use of Consolidated Data
We use consolidated data to create our rankings because we believe that this data provides the most complete picture of the businesses’ strategies, including those that involve diversification into non-traditional or fee-based businesses for which data may not be captured at the subsidiary level. As a supplement to this article, we also provide rankings of all institutions with total assets of less than $3 billion at the charter level (excluding institutions that have total assets of less than $3 billion but are subsidiaries of parents with total assets of more than $3 billion). These rankings are available online at www.ababj.com.

Note on the Treatment of Subchapter S Corporations
Due to the different tax treatment of Subchapter S corporations (S-corps), these institutions are evaluated separately from non-S corporations (non-S corps) with less than $3 billion in total assets. We determine an institution’s Subchapter S status by examining both consolidated level year-end financial filings and quarterly changes in an institution’s status. An institution is considered to be a Subchapter S corporation if the highest level reporting institution was a Subchapter S corporation in 2010 and if it held that status for one quarter or more during that year.

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