Questions
Think Like Senior Bank Management
Work through your own bank's profile and compare it to the bank you're paired with. In each area, start with the direct measurement questions to read the numbers, then move to the discussion questions to get at causes, risks and strategy. Approach it as management deciding where to protect strengths, fix weaknesses and put resources.
▶Profile Size, structure, mix
Before judging performance, understand the shape of the bank. Size, balance sheet composition, loan mix, investment mix and deposit mix set both the opportunities and the risks that follow.
Direct measurement
  • How does your total asset size compare to the other banks in the room?
  • Is your bank close in size to the one you're paired with, or much larger or smaller?
  • What share of assets are loans, and how does that compare to peers?
  • Which loan category is largest in your portfolio? Is it the same one for most peers?
  • What does your investment portfolio hold, and how much of the balance sheet is it?
  • What is your deposit mix, and which category is largest?
  • How many FTE employees do you carry, and what does that work out to per dollar of assets?
Further discussion
  • Does your size give you scale advantages, or does it limit your competitive reach?
  • How does the split between loans and securities shape your earnings potential and your liquidity?
  • If your loan mix is concentrated, is that a strategic choice or a market limitation?
  • How does your deposit mix affect what your funding costs and how stable it is?
  • Your assets per employee differ from your paired bank's. Is that business model, market, or efficiency?
  • Are these characteristics aligned with your long-term strategy, or are they a legacy of past decisions?
▶Return Earnings power
Return measures how well the bank converts its balance sheet into earnings. Strong returns can come from efficient operations, a healthy margin, diversified income and disciplined risk — or from one-time events and leverage. The question is whether yours are sustainable.
Direct measurement
  • What did the bank earn last quarter in dollars? Is quarterly net income trending up or down?
  • How does your ROA compare to peers — higher, lower, or about the same?
  • How does your ROE compare? Does it line up with your ROA, or is leverage driving the difference?
  • Is your margin wider or narrower than peers? By how much?
  • How does your yield on earning assets compare to the peer median?
  • Is your cost of funds meaningfully higher or lower than the bank you're paired with?
  • How much of your revenue is fee income relative to peers?
  • Is your overhead ratio better or worse than peers?
  • Is provision expense above, below or near peers? Is it a material drag on earnings?
Further discussion
  • If ROE is high, is it strong earnings, thin capital, or both?
  • If your margin is strong, is that pricing, asset mix, or cheap funding?
  • If your cost of funds is low, is it core deposits or simply slower repricing?
  • If fee income is high, is it diversified or riding on one line of business?
  • How much of your overhead is structural — branches, staff, systems — and how much is discretionary?
  • If provision expense is low, is credit pristine, or are you under-reserving?
  • How would these earnings hold up in a different rate environment?
▶Risk: Asset Quality Credit
Asset quality reflects the health of the loan portfolio. Non-performers and charge-offs show current stress and hint at future losses. Good credit supports stable earnings and capital; deterioration erodes both quickly.
Direct measurement
  • How does your non-performing percentage compare to peers? Inside the typical range, or outside it?
  • How does your charge-off ratio compare?
  • How far apart are you and the bank you're paired with on each?
  • Has either measure improved or worsened over the past twelve months?
  • If both are low, do they confirm each other, or is one lagging the other?
Further discussion
  • If charge-offs are elevated, is that one large credit or many small ones?
  • Which loan segments are driving your non-performers — CRE, C&I, consumer?
  • How do your underwriting standards compare to peers — more conservative or more aggressive?
  • Has your loan mix shifted recently in ways that could show up in credit later?
  • Has your provision expense been adequate against the non-performers you're carrying?
  • If your credit looks better than peers, is that skill, luck, or market conditions?
  • Are non-performers trending in a way that points to higher charge-offs next year?
▶Risk: Liquidity Funding stability
Liquidity comes from two places: assets you can turn into cash, and funding that stays put. The app shows both — a liquidity cushion net of wholesale funding, a stricter primary-liquidity measure after pledging and haircuts, plus borrowing to equity, loan to deposit, and core deposits.
Direct measurement
  • Is your liquidity level above or below the peer median? Inside the typical range, or outside it?
  • Is it positive or negative — do your liquid assets cover your wholesale funding?
  • How much of that cushion survives the primary-liquidity screen? Is the drop small or large?
  • How does your primary liquidity compare to the bank you're paired with?
  • Is your borrowing to equity higher or lower than peers, and has it moved over the past year?
  • Is your loan-to-deposit ratio above 100%, below, or about the same as peers?
  • What share of your funding is core deposits compared to peers?
Further discussion
  • If your cushion looks healthy but primary liquidity is thin, what explains the gap — pledging, portfolio mix, or the credit quality of what you hold?
  • Is a low cushion a deliberate decision to deploy assets for earnings, or a funding constraint?
  • If borrowings are high relative to equity, is that term funding supporting loan growth, or an overnight plug?
  • If deposits fell 5% next quarter, where does the replacement funding come from, and what does it cost?
  • If your loan-to-deposit ratio is low, is that under-utilization or a deliberate buffer? If high, does your plan address stressed funding markets?
  • If core deposits are below peers, is that market competition or a funding choice?
  • Between you and your paired bank, who has more room to absorb an outflow — and is the difference market or strategy?
▶Risk: Interest Rate Risk Margin exposure
Interest rate risk shows up in the timing mismatch between what your assets earn and what your funding costs. Four views: the margin itself with yield and cost on top of it, the maturity and repricing structure of your assets, and how far each side actually moved when market rates moved. The timing view is asset-side only — the UBPR treats every non-maturity deposit as short-term, so the funding side of that picture isn't trustworthy enough to show.
Direct measurement
  • Is your margin wider or narrower than a year ago? Than your paired bank's?
  • Over the same stretch, did yield or cost do more of the work? Which direction did each move?
  • Which maturity or repricing bucket holds the largest share of your assets? Is that where peers sit?
  • Slide back through the earlier quarters — has your asset structure shifted, or held steady?
  • When prime moved, how far did your loan yield follow? Same question for securities against the 10-year and the 30-year mortgage rate.
  • When fed funds moved, how far did your time deposit cost follow? Your savings and MMDA cost?
  • Which of your deposit categories moved least? Is that the same category your paired bank was stickiest in?
Further discussion
  • Deposit rates are set by somebody at your bank; asset yields reprice through maturities, prepayments and new volume. Which of your two numbers reflects a decision, and which reflects structure?
  • If your deposit costs lagged the market on the way up, will they lag on the way down — or is there less room to fall than there was to rise?
  • If your assets are concentrated short, what does another rate cut do to your margin? If concentrated long, what did the last rise already do to it?
  • Your yield moved less than the market did. Is that fixed-rate structure, competitive pricing, or mix?
  • Is your current asset timing an intentional margin position, or the residue of what borrowers wanted?
  • Over the past year, did your margin move the way your structure suggested it should? If not, what does that tell you the data isn't showing?
  • Between you and your paired bank, who is better positioned for the rate path you actually expect over the next 12–24 months?
The asset yields are tax-equivalent and the deposit costs are not. Don't subtract one page from the other to build a margin.
▶Capital Strength, capacity
Capital is the foundation of both safety and strategic flexibility. It absorbs unexpected losses, satisfies regulators, and creates room to grow. Look at equity to assets alongside the risk-based measures and judge whether your position is conservative, aggressive, or well balanced for what you're trying to do.
Direct measurement
  • How does your equity-to-assets ratio compare to peers — higher, lower, or about the same?
  • Where does your leverage ratio sit relative to peers, and have you elected the community bank leverage framework?
  • How do your CET1 and total risk-based capital ratios compare to peers?
  • Is your equity to assets close to, or far from, the bank you're paired with?
  • Do your risk-based ratios tell the same story as your leverage ratio, or a different one?
Further discussion
  • If your risk-based ratios look strong relative to your leverage ratio, what does that say about the risk weighting of your balance sheet?
  • If you grew loans 10% next year, what would that do to each ratio?
  • If you're holding more capital than peers, is it for safety, growth readiness, or a regulatory reason?
  • If you're holding less, is that aggressive growth, recent losses, or a different leverage strategy?
  • How do earnings retention and dividend payout affect your ability to build capital from here?
  • If you took a large unexpected loss, how far would it cut into these ratios?
  • Could your capital carry credit losses and margin compression at the same time?
  • If capital is strong but returns are weak, how could you deploy it to create value?
▶Growth Pace, balance
Growth drives earnings and market share, but it consumes capital and liquidity and can strain credit. Sustainable growth keeps loans and deposits roughly in step and stays inside the resources the bank actually has.
Direct measurement
  • Is total asset growth positive or negative? How does it compare to peers?
  • Is your loan growth faster, slower, or about the same as peers?
  • Is your deposit growth positive or negative, and how does it compare?
  • Is loan growth running ahead of deposit growth, behind it, or roughly even?
  • How does that spread compare to the peer median — and to the bank you're paired with?
  • Have loans and deposits moved in the same direction over the past year?
Further discussion
  • If loan growth is strong, is it demand, pricing, or looser credit standards?
  • If deposit growth is strong, is it core relationships or promotional rates?
  • If loans have outrun deposits, what funded the difference — and can that source carry another year of it?
  • If deposits have outrun loans, where is the money going, and what is it earning?
  • Has growth in either put pressure on capital or liquidity?
  • Have you entered new markets or segments to drive growth?
  • Are you growing faster or slower than your strategic plan called for?
  • If your growth is below peers, is that risk management or a missed opportunity?
  • What are the tradeoffs if you accelerate or slow growth next year?