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Balance Sheet Changes at Community Banks From 4Q 2020 to 4Q 2021

The chart shows that total deposits at community banks continued to grow at a substantial rate in 2021, funding growth primarily in securities and cash and due from accounts; however, growth in total loans was greatly impeded by forgiveness-driven declines in PPP loans.

Source: Reports of Condition and Income **

  • Deposits continued to grow in 2021 for community banking organizations (CBOs) after unprecedented growth in 2020, up $302 billion year-over-year (14 percent) including $72 billion in the most recent quarter (3 percent). These deposit inflows continue to fuel increases in liquid assets, with securities and cash holdings outpacing growth in loan portfolios.
  • The loan-to-deposit ratio at CBOs has now fallen to 71 percent, the lowest level in over 25 years. Total loans as a percentage of total assets declined from 66 percent in 2020 to 61 percent in 2021, though total loans increased $47 billion year-over-year (3 percent). Loans not associated with the Paycheck Protection Program (PPP) increased by $141 billion year-over-year (9 percent), offsetting the forgiveness-driven $94 billion decline in PPP loans with only $32 billion in PPP loans remaining.
  • Total securities have grown $172 billion in 2021, or 38 percent year-over-year, and now account for 22 percent of total assets at CBOs, up from 18 percent in 2020. Cash holdings increased $61 billion year-over-year (21 percent) in 2021, accounting for a record high 12 percent of total assets, but declined slightly by $11 billion over the past quarter.

Questions or comments? Please contact KC.SRM.SRA.CommunityBankingBulletin@kc.frb.org.


*Community banking organizations are defined as having $10 billion or less in total assets.

**Data throughout the Community Banking Bulletin have been adjusted for mergers, acquisitions, and failures.