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With so much focus on the state of the nation’s big banks, the strength of thousands of community banks across the country has become easily forgotten.  The Independent Community Bankers of America reiterated last week that over 8,000 community banks are operating in good standing and outperform bank industry averages in many notable metrics, such as leverage ratios and net charge offs.

Data from the ICBA showed that community banks with less than $1 billion in assets posted growth in net loans for the second quarter of 2009, the only segment of the banking industry to accomplish such a feat.

“Community banks lend locally, know their customers and continue to stick to traditional lending practices—all of which contribute to the continued stability and strength of the community banking sector,” said R. Michael Menzies, ICBA chairman and president and CEO of Easton Bank and Trust Co., Easton, Md.

Additional data released by the Federal Deposit Insurance Corporation showed that community banks remained the best capitalized in the industry, posting an average leverage ratio of 9.75 percent.  The FDIC’s data also showed that community banks had a net charge off to loans ratio of 1.08 percent and 3.11 percent for non current loans.  Both ratios are at least 1 percent better than the industry average.

“Because community banks are highly capitalized and well-regulated, they are more risk averse than the big banks,” said Menzies.

Community banks have posted an 8.3 percent rise in domestic deposits in the second quarter compared to a year ago.  Statistics like that may suggest that a quiet customer transition from big national banks to local community banks is already in gear.

Unlike many of the nation’s top 20 banks, community banks stood on their own during the financial crisis without government bailouts and special loans.

“Even during these economically challenging times, it’s safe to say that our nation’s community banks are the lifeblood that continues to drive America’s communities in cities and towns throughout the nation,” added Menzies.

The ICBA has nearly 5,000 members and represents more than 20,000 community banking locations nationwide.  Deposits at all ICBA member community banks are FDIC insured up to $250,000.