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Governance
01/09/2025

A Guide to Understanding Your Bank’s Metrics

Bank boards can benefit from a deeper understanding of the metrics used to describe financial performance — and asking questions to dig deeper. This article includes a glossary of common metrics used by the industry.

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About the authors
Written by
Emily McCormick Vice President of Editorial & Research

Emily McCormick is Vice President of Editorial & Research for Bank Director. Emily oversees research projects, from in-depth reports to Bank Director’s annual surveys on M&A, risk, compensation, governance and technology. She also manages content for the Bank Services Program, including Bank Director’s Online Training Series. In addition to speaking and moderating discussions at Bank Director’s in-person and virtual events, Emily writes and edits for Bank Director magazine, BankDirector.com and Bank Director’s weekly newsletter, The Slant. She started her career in the circulation department at the Knoxville News-Sentinel and graduated summa cum laude from The University of Tennessee with a bachelor’s degree in Spanish and International Business.

Emily McCormick
Vice President of Editorial & Research
Bank boards have a critical responsibility to oversee the performance of their institutions. That requires getting a handle on the various metrics that describe profitability, capital, credit quality and liquidity, understanding what each metric measures and putting them in the right context.  In Basics for Bank Directors, the Federal Reserve Bank of Kansas City notes that it’s the board’s responsibility to specify the reporting it wants to see. The board packet should include key financial information, such as the balance sheet, income statement, capital ratios and comparisons to peer institutions. Data pertaining to the loan portfolio, liquidity position and investments…

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WRITTEN BY

Emily McCormick

Vice President of Editorial & Research

Emily McCormick is Vice President of Editorial & Research for Bank Director. Emily oversees research projects, from in-depth reports to Bank Director’s annual surveys on M&A, risk, compensation, governance and technology. She also manages content for the Bank Services Program, including Bank Director’s Online Training Series. In addition to speaking and moderating discussions at Bank Director’s in-person and virtual events, Emily writes and edits for Bank Director magazine, BankDirector.com and Bank Director’s weekly newsletter, The Slant. She started her career in the circulation department at the Knoxville News-Sentinel and graduated summa cum laude from The University of Tennessee with a bachelor’s degree in Spanish and International Business.