With a steep yield curve, the portion of community bank assets maturing beyond five years has grown steadily since year-end 2000, from 16.9 percent to 18.4 percent of assets. Larger institutions hold a greater share of their assets in long-term instruments and have also seen an increase in long-term assets over the same period.
They arguably may have better access to derivatives markets and more sophisticated programs for managing their interest rate risk. Rather than resorting to the derivatives market - fewer than 600 commercial banks hold any derivatives contracts at all - most community bankers may simply choose to rely on the interest rate protection provided by their stable and reliable core deposit base.