Many community banks are positioning themselves as safe havens at a time of economic turmoil, and the smallest among them — the roughly 3,000 institutions with $100 million of assets or less — appear to be safest of all. At Dec. 31, these banks had, on average, higher capital levels, fewer charge-offs and stronger net interest margins than banks in all other asset classes, according to Federal Deposit Insurance Corp. data.

Yet their relative strength is not translating into deposit growth. While total deposits increased at banks in all other asset classes between Sept. 30 and Dec. 31, they declined 2.1 percent at banks below $100 million, continuing a troubling trend for this group.

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