Correspondent Blog

In our previous article (HERE), we explained that fee income (not net interest margin, asset size, or nine other variables) has the highest correlation to community bank performance as measured by both return on assets and equity. Growing fee income is one of the most critical investments you can make. Why? We believe that this…

Annually we study community banks’ performance to investigate which financial variables correlate to Bank ROA. We then explain that correlative relationship using further studies, analysis, and industry observations. We use average five-year ROA and measure the correlation coefficient (R2) for various financial variables. Over the years the relationship between NIM and ROA has been remarkably…

Now that we have all the 2025 data for the banking industry, we spent some time working with Amberoon, sifting through the data, the trends, and the insights to produce a dashboard and in-depth report on almost every community bank in the U.S. Beyond metrics, this is our first iteration (now in beta form) of…

With most of the banks filing their call reports, there are some interesting pictures of the banking industry that emerge. We use Amberoon’s Statum platform to analyze community banks under $20B in total assets to highlight four trends from 2025 banking performance that merit addressing when it comes to enhancing profitability in 2026. Loan and…

One reason why banks have efficiency ratios over 40% is because they install a bunch of actions – workflow, technology, and strategy, which assume that banks need to operate in silos. Commercial banking has one set of solutions, while retail has another. Banks keep data in 30+ various places, have 40+ different data models, and…

As banks finish strategic planning, it is helpful to understand your bank’s performance assuming you DON’T make any changes. A statistical reliable model that factors historical performance, current business model and future market assumptions allows bank executives to more accurately apply capital, resources, and risk to improve performance with a higher degree of confidence. In…

On the path to improving bank profitability, we concluded our summer performance series for a handful of community banks.  Because of the demand and success of the format, we are extending this program for a “Fall Performance Series.”  For banks that are consistently earning below 1% ROA, we may be able to help increase performance…

The banking industry’s average return on assets (ROA) for Q1/25 was 1.16% – an improvement from the prior quarter and the one before that.  Community banks between $100mm and $10Bn in assets recognized 1.13% ROA.  Community banks are facing several primary challenges.  If your community bank management team aims to improve your bank’s financial performance,…

As of May 2025, the Federal Open Market Committee (FOMC) maintained the federal funds rate at a target range of 4.25% to 4.5%.  This decision not to move reflects the Fed’s cautious approach amid rising risks of both inflation and unemployment, influenced by recent tariff policies.  Fed Chair Jerome Powell emphasized the heightened uncertainty, stating,…

When it comes to bank performance, there are lots of metrics to manage. The two that we would submit are the most important, are risk-adjusted return on capital (RAROC) and customer relevancy. While we have spoken at length about managing loans, deposits and customers around RAROC, in this article we focus on measuring relevance. Producing…

In our previous article (here) we analyzed the data on community bank M&A and performance, and we concluded that there is no relationship between community bank size and profitability, as measured by return on equity (ROE).  While superficially it makes sense that bigger is better, size itself does not lead to better bank performance.  Combining…

There are many experts who claim that to achieve profitability, community banks (banks under $10B in assets) must gain scale by acquiring assets.  On the surface that seems reasonable but does scale in banking result in better performance for community banks?  The answer to that question can be analyzed both empirically and anecdotally, and we…