By Vanessa Mambrino, Senior Consultant, Capital Performance Group LLC, Washington, DC, a firm providing advisory, planning, analytic, and project management support to the financial services industry.
Charter Bank of Corpus Christi, Tex., reached two milestones this year: the bank is currently celebrating both its 50th anniversary and its 10th straight appearance among community bank top performers. Charter Bank ranked #12 among subchapter S corporations with total assets of between $100 million and $1 billion.
The bank is locally owned and has "grown nicely with the community," notes Sid Ridlehuber, CEO. South Texas has a relatively strong economy due to the local energy industry and the bank has benefited from this, as all local businesses have. The primary driver of earnings in 2012 was the bank's commercial lending activities. Commercial loans (CRE and C&I loans) represent 59.5% of the bank's loan portfolio, compared to an average of 39.2% among all top performing large S-corps and 42.4% for all large S-corps. Charter Bank maintains a diversified base of commercial customers to help manage risk. The bank focuses on owner-occupied real estate lending and working capital lending, in addition to providing interim construction financing to home builders. Commercial banking has been a source of earnings throughout the time that Charter Bank has qualified as a top performer, due to "consistent, good underwriting" and "seasoned lenders," according to Ridlehuber. Approximately two-thirds of the bank's employees have been at Charter Bank for over five years.
In addition, the bank's yield on earning assets is well above that of peers. "We are not embarrassed about pricing," says Ridlehuber. "We view money as a tool, not a commodity. We price for our service, our commitment to our customers, and our responsiveness." In 2012, the ratio of interest income to average assets at Charter Bank stood at 6.32%, compared to an average of 4.86% among all top performing large S-corps and 4.22% for all large S-corps.
When asked if his bank would be back on the list next year, Ridlehuber replied, "There's a good chance." Maintaining earnings performance is difficult, especially with the great highs and lows that the financial services industry has experienced between 2002 and 2012. We heartily congratulate Charter Bank and all of the institutions that have made frequent appearances in our rankings-large, mid-size, or small.