Because Money Doesn’t Grow on Fees

Wish we’d thought of that. But alas, the credit for that slogan goes to JRN listee 5-Star BMO Harris Bank, Chicago, IL. We have reported several times on the excessive fees charged by some banks (JRN 33:08), especially those that cater to our military and their families (a la 5-Star FSNB (formerly Fort Sill National Bank, Lawton, OK, which has a service fee to transaction deposit ratio of nearly 22%, one of the highest of any bank in the nation).

This week, however, we would like to laud community banks that have low service fee charges when compared to transaction deposit dollars.


Fed to Raise Interest Rates Next Month

Fed to Raise Interest Rates Next Month


Last week we reported that, depending on asset size distribution, net interest margins (NIMs) were making gradual headway with help from the Fed’s rate hikes over the past two years. As we look forward to a quarter point increase next month (Sept. 26th) let’s delve into that a little deeper.

Last week we intentionally left Big Banks out of the discussion. The business model for these behemoths is very different from that of community banks, which is our primary focus. But …

No Rate Increase and That is Okay

No Rate Increase, and That’s Okay

The Federal Reserve held interest rates steady at the FOMC’s  two day meeting last week (between 1.75% & 2%) but the six quarter-point increases since December 2016 have slowly and steadily been making their presence known. Net interest margins (NIM) at FDIC-insured banks increased 30 basis points between the first quarter 2015 and first quarter 2018.

While smaller banks are overshadowed by the largest banks, it’s interesting to see that even the smallest community banks have seen improvements in NIM, which for banks with assets less than $100 million went from 3.58% to 3.75% in the past three years.