Community banks reported net income growth of 21.2 percent in the fourth quarter from a year ago and a 3.6 percent increase in 2020 from the year before, according to the FDIC's Quarterly Banking Profile.

2020 Numbers: Community bank provision expenses increased 141.6 percent in 2020, while net operating revenue increased 10.8 percent on a 33.7 percent gain in noninterest income. The full-year pretax return on assets ratio declined by 13 basis points to 1.31 percent in 2020 because of an increase in average assets.

Fourth Quarter: A 159.1 percent increase in income from loan sales drove community banks' improved quarterly net income and offset a 38.1 percent increase in provision expenses. Net interest margin narrowed by 30 basis points from a year ago, while community banks experienced an 18.4 percent quarterly increase in total deposits.

Capital: Community banks also posted strong capital numbers, including a 10.3 percent average leverage ratio, 11.2 percent average Community Bank Leverage Ratio, and 14.4 percent tier-1 risk based capital ratio.

Overall Industry: The overall banking industry reported a 9.1 percent net income increase from a year ago and a 36.5 percent decline from 2019. The share of unprofitable institutions remained relatively stable from a year ago at 7.3 percent, with the average return-on-assets ratio rising to 1.11 percent from 0.97 percent in the third quarter.

Deposit Insurance Fund: The DIF balance rose $1.5 billion from the third quarter to $117.9 billion, and the reserve ratio declined from 1.30 percent to 1.29 percent on rising insured deposits.

Mergers and Openings: During the fourth quarter, three new banks opened, 31 institutions were absorbed through mergers, and two banks failed.