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Changes in the balance sheet of community banks from the 4th quarter of 2020 to the 4th quarter of 2021
- Deposits continued to grow in 2021 for community banking organizations (CBOs) following unprecedented growth in 2020, up $302 billion year-over-year (14%), including $72 billion in during the last trimester (3%). These deposit inflows continue to fuel the increase in liquid assets, with securities and cash outpacing growth in loan portfolios.
- The CBO loan-to-deposit ratio has now fallen to 71%, the lowest level in more than 25 years. Total loans as a percentage of total assets fell from 66% in 2020 to 61% in 2021, although total loans increased by $47 billion year-over-year (3%). Loans not associated with the Paycheck Protection Program (PPP) were up $141 billion year-over-year (9%), offsetting the $94 billion drop in PPP loans due to forgiveness with only $32 billion in PPP loans remaining.
- Total securities increased by $172 billion in 2021, or 38% year-over-year, and now represent 22% of total CBO assets, compared to 18% in 2020. Cash increased by 61 billion year-over-year (21%) in 2021, representing an all-time high of 12% of total assets, but declined slightly by $11 billion in the last quarter.
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*Community banking organizations are defined as having total assets of $10 billion or less.
**Data from the Community Banking Bulletin has been adjusted for mergers, acquisitions and failures.