t was a scary year for banks in 2023, as five FDIC-insured institutions accounting for more than half a trillion dollars in assets collapsed. Thankfully, the banking industry emerged from the panic on solid footing, and those that were positioned to pick up the remnants are stronger than ever. The stocks of North Carolina-based First Citizens Bank, which bought Silicon Valley Bank out of FDIC control, and JPMorgan, which won the auction for First Republic Bank, have never been higher.
According to FDIC data, 94.8% of U.S. banks were profitable in 2023 and collectively generated $256.9 billion in net income, a 2.3% decline from the previous year. With interest rates remaining elevated, banks are taking advantage of the tightening environment to lend at higher rates and collectively recorded a net interest margin of 3.3% as of the end of 2023.
Forbes’ 15th annual America’s Best Banks list looks at 10 metrics measuring growth, credit quality and profitability for the 2023 calendar year, as well as stock performance in the 12 months through March 18, 2024. The 10 equally-weighted financial metrics are net interest margin; return on average tangible common equity; return on average assets; CET1 ratio; efficiency ratio; nonperforming assets as a percentage of total assets; reserves as a percentage of total assets; risk-based capital ratio; operating revenue growth; and net charge-offs as a percentage of total loans.
The 200 largest publicly-traded banks and thrifts by assets were eligible for the list, and we ranked the top 100, led by Charleston, West Virginia-based City Holding Co. at number 1. Banks that are subsidiaries of larger institutions were excluded, as were banks where the top-level parent is based outside the U.S. While S&P Global Market Intelligence provides the data, the rankings below are done separately by Forbes.
