6 A breakdown of community banks by size indicates that the ratio of NPLs to total loans peaked for every size category in 2010 (figure 8). Prior to 2007, the smallest community banks consistently had a higher ratio of NPLs than did larger community banks; but from 2007 until 2013, their NPL rate was below that of larger community banks.
In the past two years, NPLs on the balance sheets of the smallest banks have declined more slowly than for larger banks so that banks with less than $ million in assets once again have the highest NPL ratio. Let me turn now to consider changes in the number of community banks over the past 20 years at a more local level.