The Federal Reserve held rates steady at 3.5%–3.75%, prompting a review of bank profitability beyond net interest margins. This analysis focuses on Return on Assets (ROA), highlighting the 50 banks with ROAs of 2.83% or higher at year‑end 2025.

Profitability leaders span diverse business models—from fintech to credit card banks to community institutions—demonstrating that strong ROA can emerge from very different strategies when executed effectively.

For example, Titan Bank, a Texas community bank, combines a 14.76% ROA with a remarkably low 7.45% efficiency ratio, showcasing disciplined lending and strategic partnerships.

Jumbo Rate News JRN 43:12

Measuring Bank Performance: Beyond Net Income

Jay Powell and the Fed’s Open Market Committee (FOMC) decided to hold the Fed Funds rate steady (at between 3.5% and 3.75%) again this week. While this is clearly not what POTUS was hoping for, it probably made most bankers happy.

While lower rates can increase loan demand, they also can shrink net interest margins (NIM). This, of course, depends on each bank’s short and long-term strategies. If, for example, a bank is paying high rates on long-term CDs and borrowing rates fall, the bank’s margin will suffer.

We looked at NIMs quite extensively a few weeks ago (JRN 43:06) and want to explore other profitability measures today. There are actually several ways to measure a bank’s profitability. How much the bank earned in dollars is an easy way, but not ideal for comparison purposes, which is what we want today.

Instead, we will examine Return on Assets or ROA (annualized net income divided by average total assets). This tells us how effectively a bank is using its assets to generate profits. It is amazing how little overlap there is between this week’s list and the one from 43:06.

In basic terms, a high ROA denotes a highly efficient bank. On page 5, we have listed the 50 banks with the highest ROAs as of the end of 2025. This includes all banks with an ROA of 2.83% or higher.

Ten of the 50 banks listed are Industrial Loan Companies (that’s 10 of 23 total ILCs). (They are noted in blue.) In fact, the bank with the highest ROA is an ILC: 5-Star Square Financial Services Inc., Salt Lake City, UT (59177) (JRN 43:05).

Established in 2021, Square is a wholly owned subsidiary of Block, Inc. and not your typical bank. It is best known for its mobile payment processors that enable small businesses to process credit card payments from virtually anywhere.

In just a few years, Square has evolved into a $1.7 billion asset bank that is also part of a $39.5 billion ecosystem operating in eight countries. Square earned a 2025 profit of $387.769 million and reported an ROA of 32.19%. Square’s impressive Efficiency Ratio of 22.58% is also noted on page 5.

Another profitability measure, the efficiency ratio, measures how much of a bank’s operating revenue is spent on overhead. All else equal, a lower efficiency ratio is better. Square Financial’s 22.58% efficiency ratio indicates that Square spends less than 22.6¢ to earn $1.

The industry average efficiency ratio for 2025 was 55.60%; 22.58% is very admirable. Not every bank has a business model conducive to such a low ratio, however.

Full Year  2025	All      Banks	Credit Card Banks	Mortgage Lenders	Consumer Lenders
ROA	1.20%	1.63%	1.08%	1.36%
Efficiency	55.60%	56.96%	55.20%	50.77%

3½-Star Credit One Bank, N.A., Las Vegas, NV (25620), a credit card bank, also reported an impressive ROA for 2025 (21.59%), but its efficiency ratio is higher than average at 59.71%. (See chart on bottom of page 1.) That may be by design.

Credit One Bank is a philanthropic bank, donating more than $6.5 million in 2025 alone to 32 non-profits in the Las Vegas area and at least one national organization. Credit One Bank employees also contributed 4,400 volunteer hours last year. While Credit One did report net income in excess of half a billion in 2025, its mission is clearly broader than just making money.

5-Star Titan Bank, NA, Mineral Wells, TX (3225), on the other hand, is a community bank that, in addition to having the lowest efficiency ratio on page 5, also reported the third highest ROA. That’s impressive.

Titan Bank’s history goes back to 1907 when it was first established as First National Bank in Graford, TX. In 2008, the Federal Reserve approved an application from Jonathan Morris (director and prior president of BMC Capital) to establish BMC Bancshares, Inc., Dallas, TX as a holding company, which would then acquire First National Bank.

That all came to fruition in 2009 and, under its new ownership, the bank’s name was changed to Titan Bank. Titan Bank was then relocated about 15 miles away, to Mineral Wells. Mineral Wells is a town with a storied past, mostly due to the healing properties the waters are believed to possess.

Both the bank and the town were in the process of reinventing themselves. At the close of 2008, after a century of service, First NB still reported total assets of just $42.036 million. Under the new leadership of Mr. Morris, the bank began to grow, slowly at first.

Before long, Titan Bank began forming partnerships with other loan issuers, (Lending Club, for example) and that was when the real growth began. Today, Titan Bank boasts assets exceeding $800 million. It has 39 employees, most of whom work in its Dallas office. The bank relies on strict standards to decide which loans are suitable for its mission. This approach is working well.

At the end of 2025, Titan Bank’s ROA of 14.76% and efficiency ratio of 7.45% are both excellent, particularly for a community bank. Titan Bank’s 5-Star rating for the past 11 years proves that it is a job well done.