Nevertheless, the ratio of nonperforming assets to total assets rose to its highest level since 1992 as residential mortgage and construction loans continued to deteriorate. And given the near-term economic outlook, loan quality at many community banks may decline further.
I know that bankers – including community bankers – have expressed concern over some of the "mixed messages" they perceive are coming from the federal banking agencies in the current environment – particularly admonitions to continue lending at the same time that institutions are being urged to maintain adequate capital and prudent lending standards.