Native American Banks: Overview and Recent Performance

Abstract

While minority-owned commercial banks have received some attention in the finance literature, little attention has been directed at a particular sub-category: Native American commercial banks. Our paper attempts to fill that void. After covering some background information on Native American banks, we contrast this category’s financial performance with peer group institutions—focusing on the period 2005-10. Profitability, as measured by return on assets (ROA), has been a problem for Native American banks. Looking behind ROA, the Native American category has done reasonably well in maintaining net interest margin, while encountering difficulties in controlling overhead expenses and loan losses.