During 2009, banks with assets of $ billion or less recorded an aggregate net loss of more than $ billion. This weak performance stemmed primarily from sustained deterioration in residential mortgages and commercial real estate loans. Loan loss provisions reached $ billion, seven times the pre-crisis level of $ billion recorded in 2006.
Net interest margins also narrowed, squeezed by a substantial rise in nonaccruing assets, and the nonperforming assets ratio reached nearly five percent. Almost one in every three community banks recorded a net loss last year.