The Community Bank
Compliance Cost Index.
A peer benchmark of operating efficiency and estimated compliance spend across 4,053 U.S. community banks. Built from FFIEC call report data, Q1–Q4 2025.
efficiency ratio
vs. largest tier
median bank (upper bound)
ranked this edition
Why Canarie publishes it.
Canarie builds compliance automation for community banks: document review, exam preparation, and BSA/AML and CRA workflows.
The FFIEC publishes the underlying numbers every quarter. We read them so the conversation about where compliance cost lives, and how it scales with bank size, can be grounded in data instead of anecdote.
The Index is free and ungated. The methodology is fully disclosed. If a personalized tear-sheet for your institution would be useful, the form at the end of this page will get you one within two business days.
The national snapshot.
Across 4,053 U.S. community banks meeting our peer criteria, the median efficiency ratio in Q4 2025 was 63.0%. The typical bank spent 63 cents in operating expense for every dollar of revenue.
The distribution is right-skewed. A long tail of banks above the 90th percentile, those operating at 83% or worse, pull the average meaningfully above the median. These are the institutions where compliance, technology, and infrastructure costs have begun to compound faster than revenue can keep up.
The trend across 2025 was modestly favorable: the national median fell from 65.0% in Q1 to 63.0% in Q4. Improvements were uneven. The smallest banks captured the least of it.
Distribution, Q4 2025
Source: FFIEC call reports, Q4 2025. n = 4,053 banks. Bins of 5 percentage points.
Quarterly trend by asset tier
Every tier improved over 2025, but unevenly. The largest banks (over $10B) compressed their median by 1.4 pts, while sub-$100M banks improved by only 1.0 pts.
The economic gap between tiers is structural. Compliance, core technology, and risk infrastructure are largely fixed costs. A $10 billion bank can spread them across one hundred times more revenue than a $100 million bank, and it shows up in the ratio every quarter, the same way.
The spread between the smallest and largest banks, 12.6 percentage points at the median, is the entire story of this Index.
The compliance cost estimate.
If your bank is the median bank: roughly $404M in assets, operating at the national median ratio of 63.0%, you are likely spending between $318K and $763K annually on compliance.
That estimate applies an industry-standard 5 to 12% multiplier to estimated non-interest expense, a range derived from compliance officer surveys conducted by community banking trade associations. As a percentage of revenue, the smallest banks pay roughly twice what the largest pay for the same regulatory perimeter.
Estimated annual compliance cost: median bank, by tier
Methodology: revenue proxy = 2.5% NIM × total assets; non-interest expense = efficiency ratio × revenue; compliance share = 5–12% of non-interest expense. Figures are illustrative and intended for peer benchmarking only.
Asset tier benchmarks.
If the national median is the headline, the tier median is the verdict. The harder question for any community bank executive is where they sit against banks of their own size.
The chart below plots, for each tier, the 25th-to-75th percentile range (the middle half of banks). The dark mark inside each box is the tier median. The thin lines extend to the 10th and 90th percentile whiskers. If your Q4 2025 ratio places you to the right of your tier's box, you are in the worst quartile of your peer group.
State rankings.
Geography is destiny in community banking, or close to it. Banks in Utah operate at a median of 51.5%; banks in New Hampshire operate at 81.7%. A 30.2-point gap inside one country, one currency, and one regulatory regime.
Most efficient states
| State | Median | vs Nat'l | Banks |
|---|---|---|---|
| Utah | 51.5% | −11.5 | 37 |
| New Mexico | 51.6% | −11.4 | 27 |
| Puerto Rico | 53.5% | −9.5 | 3 |
| Delaware | 58.0% | −5.0 | 16 |
| South Dakota | 58.1% | −4.9 | 51 |
Least efficient states
| State | Median | vs Nat'l | Banks |
|---|---|---|---|
| New Hampshire | 81.7% | +18.7 | 16 |
| District of Columbia | 77.8% | +14.8 | 3 |
| Arizona | 77.0% | +14.0 | 11 |
| Connecticut | 76.0% | +13.0 | 27 |
| Vermont | 74.8% | +11.8 | 12 |
The watch list.
The ten community banks with the highest efficiency ratios in their asset tier as of Q4 2025. It is uncomfortable. It is also entirely public information, sourced from FFIEC call reports, assembled here for the first time as a peer-comparable list.
A high ratio is not, by itself, a sign of poor management: newly chartered institutions, banks executing a major systems conversion, and trust-only institutions all read high for reasons unrelated to operational discipline. We name the banks; the explanation is theirs to provide. Δ shows Q1 to Q4 change. Negative means improvement.
Tier 1 < $100M
| Institution | Location | Assets | Q1 '25 | Q4 '25 | Δ | |
|---|---|---|---|---|---|---|
| 01 | West Valley National Bank | Goodyear, AZ | $78M | 143.5 | 142.0 | -1.5 |
| 02 | Granger National Bank, the | Granger, TX | $52M | 138.2 | 139.7 | +1.5 |
| 03 | Talbot State Bank | Woodland, GA | $53M | 142.4 | 138.6 | -3.7 |
| 04 | Tarboro Savings Bank, SSB | Tarboro, NC | $55M | 142.5 | 137.5 | -5.0 |
| 05 | Eureka Homestead | Metairie, LA | $92M | 126.6 | 129.5 | +2.9 |
| 06 | Producer Bank of Texas | Powell, TX | $54M | 112.6 | 125.4 | +12.8 |
| 07 | State National Bank of Groom, the | Groom, TX | $62M | 110.8 | 125.3 | +14.5 |
| 08 | First State Bank of Michigan | Decatur, MI | $81M | 136.6 | 124.9 | -11.7 |
| 09 | Sunnyside Federal Savings and Loan Association of Irvington | Irvington, NY | $87M | 123.2 | 123.6 | +0.4 |
| 10 | Vista National Bank & Trust | Harveyville, KS | $63M | 98.7 | 113.8 | +15.1 |
Tier 2 $100M – $300M
| Institution | Location | Assets | Q1 '25 | Q4 '25 | Δ | |
|---|---|---|---|---|---|---|
| 01 | Midland Federal Savings and Loan Association | Bridgeview, IL | $117M | 114.2 | 132.2 | +18.0 |
| 02 | Dearborn Federal Savings Bank | Dearborn, MI | $289M | 107.0 | 121.7 | +14.7 |
| 03 | New Horizon Bank, National Association | Powhatan, VA | $251M | 134.4 | 120.1 | -14.3 |
| 04 | United Republic Bank | Omaha, NE | $197M | 104.6 | 118.2 | +13.5 |
| 05 | Wrentham Co-Operative Bank | Wrentham, MA | $188M | 124.2 | 118.1 | -6.2 |
| 06 | Adelphi Bank | Columbus, OH | $106M | 138.0 | 114.6 | -23.4 |
| 07 | East Wisconsin Savings Bank | Kaukauna, WI | $271M | 144.8 | 114.2 | -30.6 |
| 08 | Hibernia Bank | New Orleans, LA | $246M | 114.3 | 113.9 | -0.5 |
| 09 | Sonata Bank | Brentwood, TN | $282M | 134.2 | 112.9 | -21.3 |
| 10 | Commonwealth Community Bank, Inc. | Hartford, KY | $152M | 136.0 | 111.9 | -24.1 |
Tier 3 $300M – $1B
| Institution | Location | Assets | Q1 '25 | Q4 '25 | Δ | |
|---|---|---|---|---|---|---|
| 01 | Generations Bank | Seneca Falls, NY | $347M | 124.3 | 139.3 | +14.9 |
| 02 | Unibank | Lynnwood, WA | $409M | 101.2 | 129.5 | +28.3 |
| 03 | Community Savings Bank | Chicago, IL | $409M | 144.0 | 128.2 | -15.8 |
| 04 | Carver Federal Savings Bank | New York, NY | $696M | 144.9 | 123.1 | -21.7 |
| 05 | Piermont Bank | New York, NY | $520M | 116.7 | 120.4 | +3.7 |
| 06 | Haddon Savings Bank | Haddon Heights, NJ | $407M | 125.1 | 113.8 | -11.3 |
| 07 | Modern Bank, National Association | New York, NY | $664M | 105.6 | 110.3 | +4.7 |
| 08 | Devon Bank | Chicago, IL | $457M | 123.3 | 109.6 | -13.7 |
| 09 | First Seacoast Bank | Dover, NH | $600M | 117.8 | 109.6 | -8.2 |
| 10 | Axiom Bank, National Association | Maitland, FL | $784M | 97.8 | 108.6 | +10.8 |
Tier 4 $1B – $10B
| Institution | Location | Assets | Q1 '25 | Q4 '25 | Δ | |
|---|---|---|---|---|---|---|
| 01 | Intercredit Bank, National Association | Coral Gables, FL | $1611M | 137.7 | 138.2 | +0.5 |
| 02 | Blue Foundry Bank | Rutherford, NJ | $2162M | 118.3 | 108.4 | -10.0 |
| 03 | Bayfirst National Bank | Saint Petersburg, FL | $1299M | 79.0 | 108.0 | +29.0 |
| 04 | Torrington Savings Bank, the | Torrington, CT | $1014M | 94.8 | 106.5 | +11.7 |
| 05 | Evolve Bank & Trust | West Memphis, AR | $1287M | 117.1 | 104.4 | -12.7 |
| 06 | Patriot Bank, National Association | Stamford, CT | $1089M | 114.9 | 103.2 | -11.8 |
| 07 | United Fidelity Bank, FSB | Evansville, IN | $6292M | 127.8 | 100.6 | -27.2 |
| 08 | Newburyport Five Cents Savings Bank | Newburyport, MA | $1587M | 94.5 | 95.0 | +0.5 |
| 09 | Lincoln Savings Bank | Reinbeck, IA | $1753M | 94.4 | 94.7 | +0.3 |
| 10 | Federal Savings Bank, the | Chicago, IL | $1139M | 101.9 | 94.2 | -7.6 |
Tier 5 $10B+
| Institution | Location | Assets | Q1 '25 | Q4 '25 | Δ | |
|---|---|---|---|---|---|---|
| 01 | Flagstar Bank, National Association | Hicksville, NY | $87512M | 102.9 | 98.3 | -4.6 |
| 02 | Arvest Bank | Fayetteville, AR | $27787M | 85.9 | 83.4 | -2.6 |
| 03 | Apple Bank | New York, NY | $19220M | 83.5 | 78.9 | -4.6 |
| 04 | Bell Bank | Fargo, ND | $14444M | 78.3 | 77.1 | -1.3 |
| 05 | Usaa Federal Savings Bank | Phoenix, AZ | $107989M | 77.6 | 76.0 | -1.6 |
| 06 | Dollar Bank, Federal Savings Bank | Pittsburgh, PA | $12513M | 78.6 | 75.7 | -2.9 |
| 07 | Plainscapital Bank | University Park, TX | $12750M | 75.3 | 74.5 | -0.8 |
| 08 | Townebank | Portsmouth, VA | $19687M | 69.4 | 73.4 | +4.0 |
| 09 | Toyota Financial Savings Bank | Henderson, NV | $15432M | 58.9 | 73.3 | +14.4 |
| 10 | Washington Trust Bank | Spokane, WA | $10683M | 74.4 | 71.5 | -2.8 |
The year's biggest movers.
A 30-point swing in efficiency ratio over four quarters, in either direction, is rarely random. It is almost always the signature of a deliberate intervention, or the absence of one.
Largest improvements, 2025
| Institution | Tier | Q1 | Q4 | Δ | |
|---|---|---|---|---|---|
| 01 | Eastbank, National Association New York, NY | $100M – $300M | 104.7 | 34.6 | -70.0 |
| 02 | New Republic Bank Charlotte, NC | $100M – $300M | 121.0 | 61.9 | -59.1 |
| 03 | Salem Co-Operative Bank Salem, NH | $300M – $1B | 148.2 | 101.5 | -46.7 |
| 04 | Snb Bank, National Association Shattuck, OK | $100M – $300M | 110.8 | 66.5 | -44.2 |
| 05 | Mission National Bank San Francisco, CA | $100M – $300M | 128.5 | 86.8 | -41.7 |
| 06 | Finance Factors, Limited Honolulu, HI | $300M – $1B | 120.9 | 79.4 | -41.4 |
| 07 | Bank Michigan Brooklyn, MI | $100M – $300M | 96.0 | 55.7 | -40.3 |
| 08 | Choiceone Bank Sparta, MI | $1B – $10B | 107.3 | 67.4 | -39.8 |
| 09 | Emigrant Bank Miami, FL | $1B – $10B | 110.2 | 70.9 | -39.3 |
| 10 | Versabank USA, National Association Holdingford, MN | $300M – $1B | 96.4 | 59.0 | -37.5 |
| 11 | F & M Bank and Trust Company Manchester, GA | < $100M | 77.5 | 40.2 | -37.2 |
| 12 | Colonial Savings, Fa Fort Worth, TX | $300M – $1B | 91.6 | 55.3 | -36.4 |
Largest deteriorations, 2025
| Institution | Tier | Q1 | Q4 | Δ | |
|---|---|---|---|---|---|
| 01 | Applied Bank Wilmington, DE | $100M – $300M | 35.3 | 95.5 | +60.2 |
| 02 | Redemption Bank Salt Lake City, UT | < $100M | 57.8 | 96.7 | +38.9 |
| 03 | Port Richmond Savings Philadelphia, PA | < $100M | 33.7 | 71.4 | +37.7 |
| 04 | Banner Banks Birnamwood, WI | $100M – $300M | 63.4 | 100.7 | +37.3 |
| 05 | First National Bank and Trust Company of Miami, the Miami, OK | $100M – $300M | 45.7 | 78.3 | +32.6 |
| 06 | Bayfirst National Bank Saint Petersburg, FL | $1B – $10B | 79.0 | 108.0 | +29.0 |
| 07 | Unibank Lynnwood, WA | $300M – $1B | 101.2 | 129.5 | +28.3 |
| 08 | Bank of Wiggins Wiggins, MS | $100M – $300M | 74.2 | 101.7 | +27.6 |
| 09 | Peoples Bank of Kankakee County Bourbonnais, IL | $300M – $1B | 29.8 | 55.6 | +25.9 |
| 10 | Farmers State Bank of Aliceville, Kansas, the Westphalia, KS | $100M – $300M | 50.3 | 75.3 | +25.1 |
| 11 | Security State Bank Alexandria, SD | $100M – $300M | 46.0 | 70.8 | +24.9 |
| 12 | Commercial State Bank Republican City, NE | < $100M | 39.8 | 64.5 | +24.7 |
Your bank's number, by name.
A one-page version of this Index, personalized to your institution: your Q4 2025 efficiency ratio, your tier and state rank, your four-quarter trajectory, and your estimated compliance spend range, built from the same FFIEC data used in this report.
Book a short call and we'll walk you through your institution's numbers. Your personalized tear-sheet will follow within two business days.
Methodology.
Source data
FFIEC quarterly Reports of Condition and Income (call reports), filed by every U.S. depository institution and aggregated by the Federal Financial Institutions Examination Council. All four quarters of 2025.
Peer set
Banks with total assets > $50M and reported quarterly efficiency ratios in [20%, 150%] across all four 2025 quarters. The filter excludes 268 institutions (primarily trust-only entities and special-purpose banks), yielding a peer set of 4,053 banks.
Efficiency ratio
Non-interest expense ÷ net operating revenue (net interest income + non-interest income), per the standard FFIEC definition. Lower is better.
Asset tiers
Five tiers calibrated to community banking practice: under $100M; $100M–$300M; $300M–$1B; $1B–$10B; and over $10B.
Compliance cost estimate
The figures in Section 02 are estimates, intended for peer benchmarking and not for financial reporting. Constructed in three steps:
- Revenue proxy: 2.5% NIM × total assets.
- Non-interest expense: efficiency ratio × revenue.
- Compliance share: 5–12% of non-interest expense.
The 5–12% range is drawn from compliance-officer surveys conducted by the ICBA, ABA, and academic studies of regulatory cost incidence at community banks.
Watch list & movers
Watch list: ten banks with the highest Q4 2025 efficiency ratio in each tier. Movers: fifteen banks with the largest Q1→Q4 ratio decrease and increase, across all tiers.
Disclosure
Canarie builds compliance automation tools for community banks: document review, exam preparation, and BSA/AML workflow systems. We have a commercial interest in the conversations this Index provokes, not in any specific bank's ranking. The data is sourced exclusively from public FFIEC filings; no Canarie customer data is used in compiling this report.