Community banks and thrifts in the Western part of the United States are strengthening as housing, commercial real estate, agriculture and other key business sectors in that region continue to improve, the Office of the Comptroller of the Currency said. 

“The OCC is seeing positive changes in commercial real estate, the number of problem community banks is down and continues to fall compared with last year, and the housing market continues to improve,” said Kay Kowitt, the OCC’s western district deputy comptroller.

Currently 77% of district banks are highly rated, rising from the low of 64% in the latter half of 2010, the OCC stated. 

Additionally, most banks have ample sources of liquidity, and the level of deposits in banks remains high. 

The OCC said, “Strategic risk is a concern as community banks need to define and implement strategies that allow them to thrive in the face of lingering credit stress, historically low margins, competitive pressures and uncertainty about regulatory changes.”