On average, their nonperforming-loan-to-asset ratios have been low and comparable to those of the largest banking organizations, and their capital ratios have remained high. In addition, community banks continue to demonstrate a healthy ability to attract deposits, with core deposits funding about 70 percent of assets as of year-end 2005.
Community banks and small businesses The thesis that I have put forward – namely, that relationship finance is important in sustaining the role that community banks play and in accounting for their strong performance – has a number of implications for small businesses’ use of community banks and the proximity of banks and their customers.