{"product_id":"community-bank-kpi-metrics","title":"7 Critical KPIs to Guide Community Bank Profitability","description":"\u003cdiv class=\"container_new_design\"\u003e\n\u003cdiv class=\"text-section text-1_new_design\"\u003e\n\u003cdiv class=\"line_top\"\u003e\u003c\/div\u003e\n\u003ch2\u003eKPI Metrics for Community Bank\u003c\/h2\u003e\n\u003cp\u003eCommunity Bank success hinges on managing interest rate risk and operational efficiency Track 7 core metrics, starting with Net Interest Margin (NIM), which should target \u003cstrong\u003e35% or higher\u003c\/strong\u003e, as calculated for 2026 This guide details key loan portfolio health metrics, like the Loan-to-Deposit Ratio, which must stay below \u003cstrong\u003e90%\u003c\/strong\u003e for liquidity, and the Efficiency Ratio, which should aim below \u003cstrong\u003e60%\u003c\/strong\u003e We outline the formulas, benchmarks, and suggest monthly or quarterly reviews to ensure your 2026 growth targets are met, especially as loan volumes scale from $345 million in 2026 to over $130 million by 2030\n\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"image-section image-1_new_design\" id=\"main_article_image\"\u003e\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003e\n\u003cspan style=\"color: #6067F2;\"\u003e7 KPIs to Track for \u003c\/span\u003eCommunity Bank\u003c\/h2\u003e\u003cbr\u003e\n\u003ctable id=\"dwnld_tbl_id\"\u003e\n\u003ctr\u003e\n\u003cth\u003e#\u003c\/th\u003e\n\u003cth\u003eKPI Name\u003c\/th\u003e\n\u003cth\u003eMetric Type\u003c\/th\u003e\n\u003cth\u003eTarget \/ Benchmark\u003c\/th\u003e\n\u003cth\u003eReview Frequency\u003c\/th\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e1\u003c\/td\u003e\n\u003ctd\u003eNet Interest Margin (NIM)\u003c\/td\u003e\n\u003ctd\u003eMeasures core lending profitability; calculated as Net Interest Income \/ Average Interest-Earning Assets\u003c\/td\u003e\n\u003ctd\u003eaim for 35% or higher\u003c\/td\u003e\n\u003ctd\u003ereviewed monthly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e2\u003c\/td\u003e\n\u003ctd\u003eEfficiency Ratio\u003c\/td\u003e\n\u003ctd\u003eMeasures non-interest expense control; calculated as Non-Interest Expense \/ (Net Interest Income + Non-Interest Income)\u003c\/td\u003e\n\u003ctd\u003etarget below 60%\u003c\/td\u003e\n\u003ctd\u003ereviewed monthly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e3\u003c\/td\u003e\n\u003ctd\u003eLoan-to-Deposit Ratio (LTD)\u003c\/td\u003e\n\u003ctd\u003eMeasures liquidity risk; calculated as Total Loans \/ Total Deposits\u003c\/td\u003e\n\u003ctd\u003etarget 70% to 90%\u003c\/td\u003e\n\u003ctd\u003ereviewed weekly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e4\u003c\/td\u003e\n\u003ctd\u003eCost of Funds (CoF)\u003c\/td\u003e\n\u003ctd\u003eMeasures the average interest rate paid on all interest-bearing liabilities; calculated as Total Interest Expense \/ Average Interest-Bearing Liabilities\u003c\/td\u003e\n\u003ctd\u003etarget below 30%\u003c\/td\u003e\n\u003ctd\u003ereviewed monthly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e5\u003c\/td\u003e\n\u003ctd\u003eNon-Performing Loan Ratio (NPL)\u003c\/td\u003e\n\u003ctd\u003eMeasures credit risk; calculated as Non-Performing Loans \/ Total Loan Portfolio\u003c\/td\u003e\n\u003ctd\u003etarget below 10%\u003c\/td\u003e\n\u003ctd\u003ereviewed quarterly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e6\u003c\/td\u003e\n\u003ctd\u003eReturn on Equity (ROE)\u003c\/td\u003e\n\u003ctd\u003eMeasures net income generated per dollar of shareholder equity; calculated as Net Income \/ Average Shareholder Equity\u003c\/td\u003e\n\u003ctd\u003etarget 10% to 15% (initial ROE is 3%)\u003c\/td\u003e\n\u003ctd\u003ereviewed quarterly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e7\u003c\/td\u003e\n\u003ctd\u003eDeposit Growth Rate\u003c\/td\u003e\n\u003ctd\u003eMeasures the rate of increase in core deposits (Savings, Money Market, CDs); calculated as (Current Deposits - Previous Deposits) \/ Previous Deposits\u003c\/td\u003e\n\u003ctd\u003etarget 15% to 25% annual growth\u003c\/td\u003e\n\u003ctd\u003ereviewed monthly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003c\/table\u003e\n\u003cdiv class=\"dwnld_btn_div\"\u003e\u003cbutton id=\"dwnld_btn_id\" class=\"dwnld_btn_clss\"\u003eDownload Table in XLSX\u003c\/button\u003e\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\u003cbr\u003e \u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eWhich metrics best predict future revenue growth and stability for a Community Bank?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eFor the Community Bank, future revenue stability is primarily predicted by the health of its Net Interest Income (NII) drivers and the efficiency of its funding base; you're looking at loan volume growth versus deposit cost. Honestly, understanding if Community Bank is currently experiencing positive profitability trends is key, and you can check that here: \u003ca href=\"\/blogs\/profitability\/community-bank\"\u003eIs Community Bank Currently Experiencing Positive Profitability Trends?\u003c\/a\u003e It's defintely about the spread you capture between what you earn on loans and what you pay for deposits.\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eNII Drivers and Loan Health\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eTrack the growth rate of total loan portfolio volume, especially business lending.\u003c\/li\u003e\n\u003cli\u003eMonitor the Net Interest Margin (NIM), the spread between loan yields and deposit costs.\u003c\/li\u003e\n\u003cli\u003eWatch non-performing assets (NPAs) as a percentage of total loans; this signals credit risk.\u003c\/li\u003e\n\u003cli\u003eIf loan growth outpaces deposit growth, funding costs will rise, compressing margins quickly.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eFunding Costs and Fee Income\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eMeasure deposit acquisition cost (DAC) against the interest rate paid on those funds.\u003c\/li\u003e\n\u003cli\u003eGrowth in fee-based revenue, like wealth management or service charges, shows diversification.\u003c\/li\u003e\n\u003cli\u003eDeposit velocity—how fast new deposits are acquired—funds new loan originations.\u003c\/li\u003e\n\u003cli\u003eA low Cost of Funds (CoF) relative to the Average Earning Asset Yield is the stability benchmark.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eHow do we measure the true profitability of our core banking activities?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eThe true profitability of a Community Bank is measured by accurately calculating the \u003cstrong\u003eNet Interest Margin (NIM)\u003c\/strong\u003e derived from the spread between loan yields and the Cost of Funds (CoF), then benchmarking the resulting Return on Equity (ROE) against regulatory capital needs. Understanding these core metrics is defintely how you know if your relationship-first lending strategy is actually creating shareholder value, which is something founders often ask about when they look at how much the owner of a Community Bank typically make, as detailed here: \u003ca href=\"\/blogs\/how-much-makes\/community-bank\"\u003eHow Much Does The Owner Of Community Bank Typically Make?\u003c\/a\u003e\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eCalculate Net Interest Margin\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eNIM is the spread between interest earned on assets and interest paid on liabilities.\u003c\/li\u003e\n\u003cli\u003eIf average loan yield is \u003cstrong\u003e6.5%\u003c\/strong\u003e and Cost of Funds (CoF) is \u003cstrong\u003e2.0%\u003c\/strong\u003e, your NIM is \u003cstrong\u003e4.5%\u003c\/strong\u003e.\u003c\/li\u003e\n\u003cli\u003eFocus on deposit gathering to keep CoF low; every basis point saved here flows straight to the bottom line.\u003c\/li\u003e\n\u003cli\u003eNon-interest income from fees should cover operational overhead before factoring in interest spread.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eAnalyze Return on Equity\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eReturn on Equity (ROE) shows how effectively shareholder capital generates profit.\u003c\/li\u003e\n\u003cli\u003eA strong ROE target for a community bank might be \u003cstrong\u003e12% to 15%\u003c\/strong\u003e, depending on risk profile.\u003c\/li\u003e\n\u003cli\u003eCompare your achieved ROE against the minimum required regulatory capital ratios.\u003c\/li\u003e\n\u003cli\u003eIf you need to hold \u003cstrong\u003e10%\u003c\/strong\u003e equity against assets, a \u003cstrong\u003e10%\u003c\/strong\u003e ROE means you are only earning back your required capital base.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eAre our operational expenses scaling efficiently relative to our revenue base?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eYour operational scaling efficiency hinges on keeping the Efficiency Ratio below peer benchmarks, focusing immediately on controlling personnel spend against projected 2026 levels. To understand this better, Have You Drafted A Clear Executive Summary For Community Bank?\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eTrack Efficiency Ratio\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eMeasure Non-Interest Expense divided by Total Revenue.\u003c\/li\u003e\n\u003cli\u003eBenchmark this ratio against peer banks constantly.\u003c\/li\u003e\n\u003cli\u003ePersonnel costs are projected at \u003cstrong\u003e$614k\u003c\/strong\u003e in 2026.\u003c\/li\u003e\n\u003cli\u003eEnsure staffing growth doesn't outpace deposit growth.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eControl Fixed Overheads\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eThe Core Banking System costs \u003cstrong\u003e$12,000\u003c\/strong\u003e monthly.\u003c\/li\u003e\n\u003cli\u003eJustify this tech spend with clear automation gains.\u003c\/li\u003e\n\u003cli\u003eLook for fee income to offset fixed operating costs.\u003c\/li\u003e\n\u003cli\u003eIf onboarding takes 14+ days, churn risk rises defintely.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eHow effectively are we managing risk and maintaining customer trust and liquidity?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eManaging risk for the Community Bank defintely hinges on keeping the Loan-to-Deposit Ratio (LTD) below \u003cstrong\u003e85%\u003c\/strong\u003e and Non-Performing Loans (NPLs) under \u003cstrong\u003e1.5%\u003c\/strong\u003e, while customer trust is validated by achieving a Net Promoter Score (NPS) above \u003cstrong\u003e55\u003c\/strong\u003e; understanding these initial capital requirements, like those detailed in \u003ca href=\"\/blogs\/startup-costs\/community-bank\"\u003eHow Much Does It Cost To Open And Launch Your Community Bank?\u003c\/a\u003e, sets the baseline for operational stability.\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eCore Liquidity Metrics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eTarget LTD ratio must stay below \u003cstrong\u003e85%\u003c\/strong\u003e to maintain liquidity headroom.\u003c\/li\u003e\n\u003cli\u003eCurrent LTD stands at \u003cstrong\u003e82%\u003c\/strong\u003e, showing adequate deposit coverage for outstanding loans.\u003c\/li\u003e\n\u003cli\u003eKeep NPLs below the regulatory threshold of \u003cstrong\u003e1.5%\u003c\/strong\u003e of total assets.\u003c\/li\u003e\n\u003cli\u003eIf NPLs hit \u003cstrong\u003e2.5%\u003c\/strong\u003e, capital reserves must increase by \u003cstrong\u003e$5M\u003c\/strong\u003e immediately.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eMeasuring Customer Confidence\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eAim for an NPS of \u003cstrong\u003e60 or higher\u003c\/strong\u003e to signal strong community alignment.\u003c\/li\u003e\n\u003cli\u003eCurrent customer retention for small business accounts is \u003cstrong\u003e91%\u003c\/strong\u003e year-over-year.\u003c\/li\u003e\n\u003cli\u003eA \u003cstrong\u003e5-point drop\u003c\/strong\u003e in NPS correlates with a \u003cstrong\u003e2%\u003c\/strong\u003e rise in monthly deposit attrition.\u003c\/li\u003e\n\u003cli\u003eFee income stability relies on \u003cstrong\u003e80%\u003c\/strong\u003e of customers using digital services monthly.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e \u003cdiv class=\"card_smpl\"\u003e\n\n\u003cdiv class=\"double_border\"\u003e\n\n\u003cdiv class=\"card_smpl_header\"\u003e\n\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\n\u003ch3\u003eKey Takeaways\u003c\/h3\u003e\n\n\u003c\/div\u003e\n\n\u003cul class=\"lst_crct_blog\"\u003e\n\n\u003cli\u003eAchieving a Net Interest Margin (NIM) of 35% or higher is the primary driver for core lending profitability and must be reviewed monthly.\u003c\/li\u003e\n\n\u003cli\u003eOperational efficiency is critical, demanding that the Efficiency Ratio remain below 60% to effectively manage substantial initial fixed overhead costs.\u003c\/li\u003e\n\n\u003cli\u003eLiquidity and risk management require diligent monitoring of the Loan-to-Deposit Ratio, which must be maintained below the 90% threshold.\u003c\/li\u003e\n\n\u003cli\u003eThe 7-month path to break-even depends on aggressive deposit growth, targeting 15% to 25% annual increases while optimizing loan asset pricing.\u003c\/li\u003e\n\n\u003c\/ul\u003e\n\n\u003c\/div\u003e\n\n\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 1\n: \u003cspan style=\"color: #126CFF;\"\u003eNet Interest Margin (NIM)\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eNet Interest Margin (NIM) shows your core lending profitability. It tells you the spread between the interest you earn on assets, like loans, and the interest you pay out on liabilities, like customer deposits. This metric is crucial because it reflects the fundamental health of your primary revenue engine.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eShows the direct profitability of the loan book pricing strategy.\u003c\/li\u003e\n\u003cli\u003eHighlights success in managing the cost of funds relative to asset yields.\u003c\/li\u003e\n\u003cli\u003eIndicates pricing power against market interest rate fluctuations.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIgnores important non-interest income like wealth management fees.\u003c\/li\u003e\n\u003cli\u003eDoesn't capture credit losses from non-performing loans directly.\u003c\/li\u003e\n\u003cli\u003eCan be skewed by aggressive asset allocation choices seeking higher yields.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor community banks focused on local lending, the target NIM is \u003cstrong\u003e35%\u003c\/strong\u003e or higher. This benchmark is vital because it confirms you are pricing your local business loans and mortgages effectively against the cost of attracting neighborhood deposits. National banks often run lower due to scale and different funding structures.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIncrease the average yield on new commercial loans originated through better underwriting.\u003c\/li\u003e\n\u003cli\u003eAggressively shift funding mix toward lower-cost core deposits to lower the Cost of Funds.\u003c\/li\u003e\n\u003cli\u003eReview pricing on existing low-yield securities portfolios monthly for redeployment opportunities.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eNIM measures the core profitability spread. You take the total interest earned on your assets and subtract the total interest paid on your liabilities to get Net Interest Income (NII). Then, you divide that NII by your average interest-earning assets.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nNIM = Net Interest Income \/ Average Interest-Earning Assets\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eIf your bank generated \u003cstrong\u003e$500,000\u003c\/strong\u003e in Net Interest Income (NII) last month, and your average interest-earning assets (like loans and securities) totaled \u003cstrong\u003e$1,400,000\u003c\/strong\u003e, your NIM calculation is straightforward. You must track this monthly to ensure you hit the \u003cstrong\u003e35%\u003c\/strong\u003e goal. If you hit \u003cstrong\u003e$500,000\u003c\/strong\u003e NII against \u003cstrong\u003e$1.4M\u003c\/strong\u003e in assets, you achieved \u003cstrong\u003e35.7%\u003c\/strong\u003e.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nNIM = $500,000 \/ $1,400,000 = 0.357 or \u003cstrong\u003e35.7%\u003c\/strong\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e  \n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eDeconstruct NII into interest earned and interest paid components monthly.\u003c\/li\u003e\n\u003cli\u003eModel how a 50 basis point rate shift affects the NIM projection defintely.\u003c\/li\u003e\n\u003cli\u003eEnsure deposit growth strategies prioritize low-cost checking accounts.\u003c\/li\u003e\n\u003cli\u003eCompare NIM against the Cost of Funds (CoF) trend line for context.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 2\n: \u003cspan style=\"color: #126CFF;\"\u003eEfficiency Ratio\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eThe Efficiency Ratio shows how well you control non-interest expenses relative to your total operating income. For a bank, this measures operational discipline—how much it costs to generate every dollar of revenue before accounting for funding costs. The target is keeping this ratio \u003cstrong\u003ebelow 60%\u003c\/strong\u003e.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eDirectly tracks \u003cstrong\u003enon-interest expense\u003c\/strong\u003e control against revenue generation.\u003c\/li\u003e\n\u003cli\u003eHighlights operational leverage as income grows faster than overhead.\u003c\/li\u003e\n\u003cli\u003eAllows comparison against peers using standard industry metrics.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIgnores the cost of funds (interest paid on deposits).\u003c\/li\u003e\n\u003cli\u003eCan be skewed by one-time large income events or asset sales.\u003c\/li\u003e\n\u003cli\u003eDoesn't account for credit risk inherent in aggressive loan growth.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor a community bank, a ratio under \u003cstrong\u003e60%\u003c\/strong\u003e is generally considered efficient and well-managed. National banks often run tighter, sometimes hitting 50% or lower due to massive scale, but that’s not your immediate goal. If your initial ratio is higher, say \u003cstrong\u003e75%\u003c\/strong\u003e, you know exactly where management needs to focus: cutting overhead or boosting fee income.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eAutomate manual processes to lower staffing costs, a major non-interest expense.\u003c\/li\u003e\n\u003cli\u003eIncrease non-interest income by cross-selling wealth management services.\u003c\/li\u003e\n\u003cli\u003eNegotiate better terms with third-party vendors for core processing systems.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYou calculate this ratio by dividing all operating costs not related to interest expense by the total income derived from both lending and fees. This gives you a clear picture of overhead efficiency.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nEfficiency Ratio = Non-Interest Expense \/ (Net Interest Income + Non-Interest Income)\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSay your bank has \u003cstrong\u003e$100,000\u003c\/strong\u003e in Non-Interest Expense for the month. Net Interest Income (NII) is \u003cstrong\u003e$150,000\u003c\/strong\u003e and Non-Interest Income from fees is \u003cstrong\u003e$20,000\u003c\/strong\u003e. We add the income streams together first.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nEfficiency Ratio = $100,000 \/ ($150,000 + $20,000) = \u003cstrong\u003e58.8%\u003c\/strong\u003e\n\u003c\/div\u003e\n\u003cp\u003eSince \u003cstrong\u003e58.8%\u003c\/strong\u003e is below the \u003cstrong\u003e60%\u003c\/strong\u003e target, this shows good control over operating costs relative to the income generated this period; defintely a good sign.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e  \n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eReview this metric \u003cstrong\u003emonthly\u003c\/strong\u003e, as required by the target cadence.\u003c\/li\u003e\n\u003cli\u003eScrutinize the components of Non-Interest Expense for quick wins.\u003c\/li\u003e\n\u003cli\u003eCompare the ratio against the Cost of Funds (CoF) for a fuller picture.\u003c\/li\u003e\n\u003cli\u003eUnderstand that initial ratios might be high due to startup overhead costs.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 3\n: \u003cspan style=\"color: #126CFF;\"\u003eLoan-to-Deposit Ratio (LTD)\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eThe Loan-to-Deposit Ratio (LTD) tells you how much of the money customers put into the bank you are actively lending out. It is the primary measure of \u003cstrong\u003eliquidity risk\u003c\/strong\u003e, showing if you rely too heavily on your core funding base to support your loan book. If this number is too high, you might not have enough cash on hand for unexpected withdrawals.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eQuickly assesses immediate funding stability against loan commitments.\u003c\/li\u003e\n\u003cli\u003eGuides lending volume decisions based on current deposit inflows.\u003c\/li\u003e\n\u003cli\u003eEnsures the bank isn't over-leveraged on customer money for growth.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIt ignores non-deposit funding sources like wholesale markets.\u003c\/li\u003e\n\u003cli\u003eA very low ratio signals missed opportunities to earn Net Interest Income.\u003c\/li\u003e\n\u003cli\u003eIt doesn't differentiate between stable core deposits and volatile brokered deposits.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor a community bank focused on relationship lending, the sweet spot is generally between \u003cstrong\u003e70% and 90%\u003c\/strong\u003e. Staying below 70% means you are holding too much cash earning low returns, hurting your Net Interest Margin. Ratios consistently above 90% put significant pressure on your liquidity position, especially if deposit growth slows down.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eAggressively market high-yield savings products to boost Total Deposits.\u003c\/li\u003e\n\u003cli\u003eTemporarily slow loan origination if the ratio creeps above 90%.\u003c\/li\u003e\n\u003cli\u003eIf the ratio is too low, deploy excess cash into higher-yielding securities.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYou calculate the LTD by dividing your total outstanding loans by the total amount of customer deposits you hold. This ratio is critical for managing the bank’s immediate cash position.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nLTD Ratio = Total Loans \/ Total Deposits\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSay your bank has $150 million in outstanding business loans and mortgages, and customer deposits total $180 million at the end of the month. Here’s the quick math:\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nLTD Ratio = $150,000,000 \/ $180,000,000 = 0.833 or \u003cstrong\u003e83.3%\u003c\/strong\u003e\n\u003c\/div\u003e\n\u003cp\u003eAn 83.3% ratio is healthy, sitting nicely within the target range, meaning you are lending out most of your deposits but still holding a buffer.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e  \n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eReview this metric \u003cstrong\u003eweekly\u003c\/strong\u003e, not just monthly, due to its liquidity focus.\u003c\/li\u003e\n\u003cli\u003eIf Deposit Growth Rate spikes, the LTD ratio will drop fast; monitor both together.\u003c\/li\u003e\n\u003cli\u003eA ratio above 95% means you defintely need to focus on deposit gathering immediately.\u003c\/li\u003e\n\u003cli\u003eUse this metric alongside Cost of Funds to ensure you aren't paying too much for deposits just to keep the ratio low.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 4\n: \u003cspan style=\"color: #126CFF;\"\u003eCost of Funds (CoF)\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eCost of Funds (CoF) tells you the average interest rate you pay for every dollar of interest-bearing liabilities, like customer deposits and borrowings. This metric is the direct cost component of your Net Interest Income (NII). If you don't control this cost, your spread—the difference between what you earn on loans and what you pay out—shrinks fast.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eDirectly measures the expense side of your interest spread calculation.\u003c\/li\u003e\n\u003cli\u003eHelps you price new loan products accurately to maintain margin targets.\u003c\/li\u003e\n\u003cli\u003eFlags when you are relying too heavily on expensive funding sources, like brokered deposits.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIt ignores the value of non-interest-bearing liabilities, like basic checking accounts.\u003c\/li\u003e\n\u003cli\u003eIt lags behind market rate changes; rising Federal Funds rates impact your funding costs immediately.\u003c\/li\u003e\n\u003cli\u003eA low CoF might hide poor asset quality if loans are priced too low just to attract deposits.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor community banks focused on relationship banking, managing CoF is critical to maximizing Net Interest Margin (NIM). Your target is keeping this cost \u003cstrong\u003ebelow 30%\u003c\/strong\u003e. If your CoF approaches 40%, you are paying too much for your liabilities relative to your asset yields, which signals trouble for profitability, especially in a rising rate environment.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eShift funding mix toward low-cost core deposits over high-rate Certificates of Deposit (CDs).\u003c\/li\u003e\n\u003cli\u003eActively manage deposit pricing to avoid paying above-market rates to retain existing customers.\u003c\/li\u003e\n\u003cli\u003eIf your Loan-to-Deposit Ratio (LTD) is high, slow loan growth until deposit gathering catches up.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYou calculate Cost of Funds by dividing the total interest you paid on all interest-bearing liabilities by the average balance of those liabilities over the period. This gives you the effective rate you are paying for your money.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nCoF = Total Interest Expense \/ Average Interest-Bearing Liabilities\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSay for Q3, your bank recorded \u003cstrong\u003e$1,800,000\u003c\/strong\u003e in Total Interest Expense paid on deposits and borrowings. Your average balance of those interest-bearing liabilities for the same period was \u003cstrong\u003e$12,000,000\u003c\/strong\u003e. Here’s the quick math to find your CoF rate.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nCoF = $1,800,000 \/ $12,000,000 = 0.15 or \u003cstrong\u003e15.0%\u003c\/strong\u003e\n\u003c\/div\u003e\n\u003cp\u003eThis \u003cstrong\u003e15.0%\u003c\/strong\u003e CoF is well below the 30% target, meaning your funding costs are currently manageable relative to your liabilities base.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e  \n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eReview the CoF breakdown monthly to see which liability segment is driving costs up.\u003c\/li\u003e\n\u003cli\u003eIf your LTD ratio is near \u003cstrong\u003e90%\u003c\/strong\u003e, you defintely rely more on wholesale funding, which usually raises CoF.\u003c\/li\u003e\n\u003cli\u003eCompare your CoF against your Net Interest Margin (NIM) to ensure the spread remains wide enough.\u003c\/li\u003e\n\u003cli\u003eSegment your liabilities: track the CoF for CDs versus the CoF for savings accounts separately.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 5\n: \u003cspan style=\"color: #126CFF;\"\u003eNon-Performing Loan Ratio (NPL)\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eThe Non-Performing Loan Ratio (NPL) shows what percentage of your loans aren't being paid back according to the agreed terms. For your Community Bank, this is the main measure of \u003cstrong\u003ecredit risk\u003c\/strong\u003e. You need to keep this ratio \u003cstrong\u003ebelow 10%\u003c\/strong\u003e, checking the numbers every \u003cstrong\u003equarter\u003c\/strong\u003e.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eSpotting bad loans early before they cause big write-offs.\u003c\/li\u003e\n\u003cli\u003eGuiding lending standards and underwriting decisions immediately.\u003c\/li\u003e\n\u003cli\u003eMaintaining investor and regulator confidence in asset quality.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIt lags; loans become non-performing months after the borrower struggles.\u003c\/li\u003e\n\u003cli\u003eIt doesn't show the severity of the loss on those bad loans.\u003c\/li\u003e\n\u003cli\u003eAggressive loan restructuring can artificially keep the ratio low temporarily.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor community banks, keeping NPLs low is critical because your capital base is smaller than national chains. While the target is \u003cstrong\u003ebelow 10%\u003c\/strong\u003e, healthy, well-managed banks often aim for \u003cstrong\u003eunder 3%\u003c\/strong\u003e, especially in stable economic times. If your ratio creeps toward \u003cstrong\u003e5%\u003c\/strong\u003e, it signals serious underwriting issues that need immediate attention.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eTighten underwriting standards, especially for new small business loans.\u003c\/li\u003e\n\u003cli\u003eImplement proactive loan review processes \u003cstrong\u003e60 days\u003c\/strong\u003e before payments are due.\u003c\/li\u003e\n\u003cli\u003eIncrease loan loss reserves immediately when NPLs breach \u003cstrong\u003e8%\u003c\/strong\u003e.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYou calculate\nthe NPL Ratio by dividing the total dollar amount of loans that are severely delinquent by the total dollar amount of loans you have on the books. This gives you a percentage that shows the health of your asset side.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nNPL Ratio = (Non-Performing Loans \/ Total Loan Portfolio) x 100\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSay your Community Bank has a total loan portfolio valued at \u003cstrong\u003e$50 million\u003c\/strong\u003e at the end of the quarter. If $3 million of that total is currently classified as non-performing (loans 90+ days past due), here is the math to see if you hit your target.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nNPL Ratio = ($3,000,000 \/ $50,000,000) x 100 = \u003cstrong\u003e6.0%\u003c\/strong\u003e\n\u003c\/div\u003e\n\u003cp\u003eThis \u003cstrong\u003e6.0%\u003c\/strong\u003e result is below your \u003cstrong\u003e10%\u003c\/strong\u003e target, which is good news for credit quality this period.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e  \n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eDefine 'Non-Performing' consistently across all departments, usually 90 days past due.\u003c\/li\u003e\n\u003cli\u003eReview NPL trends against the Loan-to-Deposit Ratio (LTD) monthly, not just quarterly.\u003c\/li\u003e\n\u003cli\u003eEnsure loan officers are incentivized on loan quality, not just volume booked.\u003c\/li\u003e\n\u003cli\u003eIf you see NPLs rising, defintely review your collateral valuation process right away.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 6\n: \u003cspan style=\"color: #126CFF;\"\u003eReturn on Equity (ROE)\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eReturn on Equity (ROE) tells you how much profit your bank generates for every dollar of shareholder equity invested. It’s the ultimate measure of management efficiency in deploying owner capital. You must target \u003cstrong\u003e10% to 15%\u003c\/strong\u003e, but your initial reading is only \u003cstrong\u003e3%\u003c\/strong\u003e.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eShows how well shareholder money is working for the bank.\u003c\/li\u003e\n\u003cli\u003eDirectly links operational results (Net Income) to owner investment.\u003c\/li\u003e\n\u003cli\u003eHelps attract future equity investors looking for high returns.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eCan be artificially inflated by taking on too much debt (leverage).\u003c\/li\u003e\n\u003cli\u003eDoesn't account for the actual cost of that equity capital.\u003c\/li\u003e\n\u003cli\u003eIt's backward-looking, based on past Net Income figures.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor established, stable financial institutions, a healthy ROE usually sits between \u003cstrong\u003e10% and 15%\u003c\/strong\u003e. Your initial projection of \u003cstrong\u003e3%\u003c\/strong\u003e is typical for a newly capitalized bank, but it signals that capital deployment needs immediate focus. If you don't hit that target range quickly, it suggests inefficient use of the equity base you’ve raised.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIncrease Net Interest Margin (NIM) by optimizing loan pricing versus deposit costs.\u003c\/li\u003e\n\u003cli\u003eAggressively reduce overhead expenses to lower Non-Interest Expense, improving the Efficiency Ratio.\u003c\/li\u003e\n\u003cli\u003eAccelerate loan portfolio growth while maintaining credit quality to boost Net Income faster than equity grows.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eTo figure out your ROE, you divide the bank’s final profit by the average equity held by owners over that period. This calculation needs to be reviewed \u003cstrong\u003equarterly\u003c\/strong\u003e to track progress toward your goal.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nNet Income \/ Average Shareholder Equity\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eIf your bank generated \u003cstrong\u003e$300,000\u003c\/strong\u003e in Net Income last quarter, and the average shareholder equity base was \u003cstrong\u003e$10 million\u003c\/strong\u003e, the calculation shows your current performance.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\n$300,000 \/ $10,000,000 = \u003cstrong\u003e3%\u003c\/strong\u003e ROE\n\u003c\/div\u003e\n\u003cp\u003eThis \u003cstrong\u003e3%\u003c\/strong\u003e result confirms you are far from the \u003cstrong\u003e10%\u003c\/strong\u003e target, meaning you need to grow income or manage the equity base better.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e  \n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eTrack ROE alongside the Efficiency Ratio; high costs crush this metric.\u003c\/li\u003e\n\u003cli\u003eEnsure you use Average Shareholder Equity, not just year-end figures.\u003c\/li\u003e\n\u003cli\u003eIf you raise new capital, ROE will temporarily drop; monitor the dilution effect.\u003c\/li\u003e\n\u003cli\u003eFocus on driving Net Income growth faster than the equity base expands, defintely.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 7\n: \u003cspan style=\"color: #126CFF;\"\u003eDeposit Growth Rate\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eDeposit Growth Rate measures how fast your core funding base—Savings, Money Market, and Certificates of Deposit (CDs)—is expanding. This metric is vital because core deposits are the cheapest, most stable source of funds you use to make loans. If growth stalls, you face higher funding costs or slower lending capacity.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eFunds loan growth without relying on expensive wholesale markets.\u003c\/li\u003e\n\u003cli\u003eIndicates strong community trust and successful relationship banking efforts.\u003c\/li\u003e\n\u003cli\u003eSupports a lower Cost of Funds (CoF) if growth comes from low-rate savings.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eChasing high growth might force you to raise CD rates unsustainably high.\u003c\/li\u003e\n\u003cli\u003eIt doesn't distinguish between stable, long-term deposits and volatile balances.\u003c\/li\u003e\n\u003cli\u003eRapid growth can strain operational capacity, like onboarding new accounts quickly.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor a community bank focused on relationship lending, the target range is usually \u003cstrong\u003e15% to 25%\u003c\/strong\u003e annual growth. Hitting this range signals you’re effectively capturing local liquidity. Falling below \u003cstrong\u003e10%\u003c\/strong\u003e suggests competitors are winning your local market share, which is a problem for a relationship-first model.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eLaunch targeted campaigns for local small business operating accounts.\u003c\/li\u003e\n\u003cli\u003eOffer slightly above-market introductory rates on Money Market accounts for 90 days.\u003c\/li\u003e\n\u003cli\u003eTie loan approvals directly to opening a corresponding operating deposit account.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYou calculate this by taking the change in total core deposits and dividing it by the starting deposit balance. This gives you the percentage change over the period you are measuring.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\n(Current Deposits - Previous Deposits) \/ Previous Deposits\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eIf last year's core deposits totaled \u003cstrong\u003e$100 million\u003c\/strong\u003e, and this year they reached \u003cstrong\u003e$118 million\u003c\/strong\u003e, you calculate the growth rate like this:\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\n($118,000,000 - $100,000,000) \/ $100,000,000 = \u003cstrong\u003e0.18 or 18%\u003c\/strong\u003e\n\u003c\/div\u003e\n\u003cp\u003eAn 18% growth rate is solid, showing the bank is successfully attracting and retaining local funds.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e  \n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eReview this metric \u003cstrong\u003emonthly\u003c\/strong\u003e, not just annually, to catch drift early.\u003c\/li\u003e\n\u003cli\u003eSegment growth by product: Savings vs. CDs vs. Money Market balances.\u003c\/li\u003e\n\u003cli\u003eWatch the Loan-to-Deposit Ratio (LTD) alongside this; high growth without loan demand builds excess liquidity.\u003c\/li\u003e\n\u003cli\u003eYou need to defintely track the average duration of new deposits to ensure stability.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e","brand":"FinancialModelsLab","offers":[{"title":"Default Title","offer_id":49303688610035,"sku":"community-bank-kpi-metrics","price":0.0,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0522\/6191\/2762\/files\/community-bank-kpi-metrics.webp?v=1782679416","url":"https:\/\/financialmodelslab.com\/products\/community-bank-kpi-metrics","provider":"Financial Models Lab","version":"1.0","type":"link"}