High-performing community banks know that the key to growing profitably and building franchise value is to control what they can and strategically manage against market factors they cannot. Banks have recently had a laser focus on the efficiency ratio as they strive to offset the additional expense of loan loss provisions to cover asset quality issues.
The efficiency ratio is comprised of noninterest expense, noninterest income and net interest margin. However, we’re going to focus on expense management and fee income, because community banks have the greatest control over these variables. The management of these two elements is critical to maintaining or optimizing overall earnings performance.

It would seem like a propitious time for the nation’s only union-owned bank to make a comeback, with the Occupy Wall Street protests having revived age-old concerns about the costs of unfettered capitalism.
But despite some favorable political headwinds and a badly needed injection of capital, New York Amalgamated Bank faces some serious challenges ahead.