Banking industry benchmarks: 2021 quarter two

As a leader, you know it’s smart to build on your company’s strengths and focus on key performance indicators (KPIs) where improvement is needed. However, do you know where specifically your organization might be falling short compared to other banks within the industry?

The below report is meant for you in mind to utilize as a management resource to evaluate your financial institutions performance in key areas. This report includes 2021 quarter three data of commercial and savings banks with less than $15 billion in totals assets. For a more specific breakdown about how your company’s KPIs compares to other banking institutions of similar asset size, please contact our team and see a sample report below.

Banking industry benchmarks, trends and definitions - 2021 quarter three

Indicates financial strength based on the sum of the bank’s equity capital and disclosed reserves, and sometimes non-redeemable, non-cumulative preferred stock. Tier 1 capital is a bank’s core equity capital and consists of shareholders’ equity and retained earnings. Under Basel III, the minimum is 6%, which is calculated by dividing the bank’s tangible equity by its total tangible assets.


Indicates cost leadership. If it is too high, the bank’s liquidity may not cover unexpected fund requirements. If it is too low, the bank may be missing out on earnings. The calculation is total loans and lease-financing receivables net of unearned income and the allowances for possible loans and lease financing receivable losses divided by total assets.


Assesses a bank’s liquidity and its ability to cover withdrawals made by customers. It is calculated by dividing the bank’s total loans by its total deposits.


Calculates the sum of non-performing assets and loans 90 days or more delinquent but still accruing interest, as a percent of assets.


Refers to the profitability of a company over a financial year. It modifies return on equity (ROE) by changing the denominator, shareholder’s equity, to average shareholder’s equity.


Looks at total interest, dividend and fee income earned on loans and investments as a percentage of average earning assets. It is a solvency measure used by banking regulators.


Reveals the interest rate paid by financial institutions for the funds they deploy in their business.


Subtracts interest expenses from investment returns, then divides by average earning assets. It is one of the profitability indicators specific to a bank’s investing and lending activities over a period of time.


Shows bank and creditor income derived primarily from fees including deposit and transaction fees, non-sufficient funds (NSF) fees, annual fees, monthly account service charges, inactivity fees, check and deposit slip fees, and so on as a percentage of total income.


Measures a bank’s overhead as a percentage of its revenue on a fully taxed equivalent basis. It is an indication of a bank’s ability to turn resources into revenue. A ratio of 50% is usually the optimal ratio. An increase in the efficiency ratio indicates either increasing costs or decreasing revenues.


Divides a bank’s allowance for loan and lease losses (ALLL) by its total loans and leases.


Identifies the total dividend declared divided by the total net income of a bank. The amount not paid out in dividends to stockholders is held by the financial institution for growth and is called retained earnings.



Data contained in this report was gathered from S&P Global Market Intelligence, a division of S&P Global, and analyzed. This report includes 2021 quarter two data of commercial and savings banks with less than $15 billion in total assets (4,565 institutions). Benchmarks shown above are not a true average and instead represent the average of all the average data reported by each institution for the year. Baker Tilly has not audited and offers no form of assurance on the data presented. This report is intended to be used as a valuable management resource when evaluating your institution’s performance.

Kevin Schalk
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