Department of Financial Institutions
Kentucky Banks Rank Eighth in Profitability

Press Release Date:  Wednesday, June 10, 2009  
Contact Information:  Kelly May, Public Information Officer
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   FRANKFORT, KY (June 10, 2009) – The Kentucky Department of Financial Institutions (DFI) today announced that Kentucky banks are ranked eighth in the nation in terms of return on average assets (ROAA), which is a primary measure of profitability.

   ROAA is an indicator of how profitable a bank is relative to its total assets. ROAA shows how effectively management uses assets to generate earnings. Historically, a ROAA of approximately 1.0 percent is considered the benchmark goal for most banks.  

   In the First Quarter Banking Profile issued by the Federal Deposit Insurance Corp. (FDIC), the annualized ROAA for the 199 financial institutions headquartered in Kentucky equaled 0.9 percent in first quarter of 2009. Only seven states achieved a ROAA higher: North Dakota (1.48), Colorado (1.44), Hawaii (1.38), Montana (1.25), Oklahoma (1.17), West Virginia (1.02) and New York (0.99). The average ROAA across the nation, including the District of Columbia and Puerto Rico, was approximately .22 percent, and many states have a very low or negative ROAA.

   “A bank’s return on assets is a key indicator for the banking industry,” said DFI Commissioner Charles Vice. “Kentucky banks continue to do well, especially compared to other states in the nation and contiguous states.”

   Of the 199 banks headquartered in Kentucky, DFI regulates the 157 state-chartered banks. State-chartered banks’ ROAA slightly outperformed that of national banks operating in Kentucky, but generally both are doing very well.

   Kentucky banks are generally well managed, and have stable asset quality and earnings streams, Vice said. State-chartered banks continue to offer a wide variety of products that help them withstand market fluctuations. Customer deposits are insured by the FDIC for up to $250,000, or possibly more depending on how the accounts are structured.

   More data about ROAA or other indicators of bank stability can be found on the FDIC Web site at

   DFI is an agency in the Public Protection Cabinet. It supervises the financial services industry by examining, chartering, licensing and registering various financial institutions, securities firms and professionals operating in Kentucky. DFI’s mission is to serve Kentucky residents by maintaining a stable financial industry, continuing effective and efficient regulatory oversight, promoting consumer confidence, and encouraging economic opportunities.