Nearly two years after the financial crisis began to tarnish the reputations of the nation's biggest banks, community bankers are finding they can still steal business from giant lenders.

Bankers from Cardinal Financial Corp., Bank of Marin Bancorp and other small institutions said at a conference in New York last week that their local focus is helping them poach customers from the likes of Wells Fargo & Co. and Comerica Inc.

"We're definitely seeing deposits and loans coming out of the large banks," said Bernard Clineberg, the chairman and chief executive of the $2.1 billion-asset Cardinal Financial in McLean, Va. "We've been taking a lot of deals from the large banks."

The shifting of individual and business accounts from large banks to local lenders was a boon for community bank deposits last year. Deposits grew about 2.4% in 2009 at banks with $10 billion or less of assets, according to the Federal Deposit Insurance Corp.

Community bankers attending the conference, sponsored by KBW Inc.'s Keefe, Bruyette & Woods Inc., said the trend continued in the first half of 2010, though at a slower pace.

Customers still distrust institutions with $30 billion or more of assets, they said, even as the large institutions stopped bleeding red ink and repaid investments they received under the Troubled Asset Relief Program. Though the deposit-growth trend appears to have hit a plateau, community bankers say they now hope to boost lending by exploiting big banks' still-tarnished reputations.

Russell A. Colombo, the president and CEO of the $1.18 billion-asset Bank of Marin in Novato, Calif., said he joins pitches to small and midsize business clients to show he's no big-time banker. He said his presence is a selling point for such clients. "They get attention," he said. "The big banks are a commodity provider."

Joel Sklar, Bank of Marin's chairman, said the battered images of giant lenders like Citigroup Inc. do not appear to be improving even with profit growth. "They're still seen as making money off you," he said.

Meanwhile, Cardinal, which overlaps with BB&T Corp. and Wells Fargo's Wachovia Bank on the East Coast, has gone on the attack, hiring away a long-time Wachovia executive this year for its wealth management business, Clineberg said. Cardinal's sales staff has a goal to win the accounts of Wachovia customers.

As Wells Fargo changes the signs over the Wachovia branches it bought in 2008, Clineberg said, it is a particularly good time to poach. "You get a shot at the clients, at the accounts," he said.

Philip Wenger, the president and chief operating officer of Fulton Financial Corp. in Lancaster, Pa., said troubles at the largest banks have helped his institution attract customers, deposits and talent in the past 18 months. Though the trend has been "less meaningful" this year than last, he added, "it's still beneficial."

Wenger pointed to the distinction between his bank and larger companies several times in a presentation to potential investors last week. The company says its efficiency ratio was on average better than those of the top 50 banks last quarter. Loans and revenue on average performed better than the group, too, it said.

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