Here at Bank Director, we often analyze why some banks, and some bank boards, outperform others. In our annual Bank Performance Scorecard, with 2015 results published last month, we ranked the top performing banks, using profitability, capital and asset quality as our guide.
But in this Growth issue, we do something a little different. We turn the tables and take a look at how banks performed for investors. The ranking of the top 10 acquirers shows which publicly traded banks who completed at least two acquisitions in the last five years had the best shareholder returns in that time frame. If you had invested in any of these banks five years ago, you would have done exceedingly well.
For banks that perform for investors, growth is an important metric. Investors like to see growth and reward it handsomely, as long as such acquisitions are skillfully executed. Not all management teams can pull off successful acquisitions, nor do they want to play in that game. But for those that do, it pays to study the best acquirers and what they do well. Our writer, Adam O’Daniel, found that all the banks that scored high in this ranking took advantage of opportunities in a rebounding economy, and they were richly rewarded by their shareholders during the last five years. Their timing was impeccable. Some of them purchased failed banks from the Federal Deposit Insurance Corp. Many combined deal making with strong organic growth. Some of the top deal makers also are the top performers in terms of our Scorecard, such as Little Rock, Arkansas-based Bank of the Ozarks and Phoenix-based Western Alliance Bancorp. Not all of them are highly profitable, highly capitalized or even have above-average asset quality but they all have been rewarded by investors for growth.
The Growth issue also includes strategy stories for organic growth. John Engen has a story about uncovering cost savings amid surging growth in debit and credit card revenue. Ed Avis has a story about commercial real estate growth, and what boards can do to mitigate risk. Karen Epper Hoffman writes about mobile banking outside the United States, where offerings often exceed what is available here.
Finally, this issue includes an interview with Glacier Bancorp’s retiring CEO Mick Blodnick, who talks about using acquisitions to grow in parts of the West that are historically slow growing. There also is a video interview with Southwest Bancorp President and CEO Mark Funke, who turned the struggling company around and focused on consistency, the core market and core values.