Correspondent Blog

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,…

When it comes to bank acquisitions, there are metrics that matter. We analyzed all community banks acquired from 2020 to the end of 2024 (approximately 600 banks), and we measured those defunct banks’ performance compared to surviving banks.  The defunct banks were all under $10Bn in assets and our hypothesis was that return on assets…

In Q2/24 the average return on assets (ROA) for community banks (under $10B in assets) was 1.08%, with an average ROE of 10.44%.  But within the community banking sector, performance varied among banks significantly.  We analyze the drivers of ROA for the community bank segment last quarter and consider what financial variables explain bank performance….

In a previous article (HERE), we analyzed industry performance and demonstrated that the average five-year net interest margin (NIM) and return on assets (ROA) are unrelated.  The correlation coefficient (R2) between these two variables is NEGATIVE 0.02 (essentially no explanatory relationship).  This lack of connection has been a general observation in the banking industry for…