Bernanke Says Community Banks Have Strengthened

WASHINGTON (AP) — Federal Reserve Chairman Ben Bernanke says the health of the nation's community banks has strengthened, despite what he calls a frustratingly slow economic recovery.

In remarks to a conference on community banking, Bernanke says profits at smaller banks have been rising for the past several quarters. He said the quality of the loans on their books has stopped deteriorating, although the proportion of bad loans remains high.

Bernanke says the hundreds of community banks, those with assets below $10 billion, have also seen their capital reserves against future loses increase, in part because they can more easily raise capital.