Pub. 1 2020 Issue 5

www.cbak.com 12 In Touch Figure 4: 1st Quarter Payroll Coverage via PPP Loans by State (source: United States Small Business Administration / Federal Deposit Insurance Corporation) Figure 5: Loan and Deposit Balances at Community Banks (source: United States Federal Deposit Insurance Corporation) Upon closer examination of the data, it is clear that this current recession poses both significant economic threats and concurrent opportunities, from which to make the most of an inevitable economic phenomenon and to rebound on stronger footing and shoulder another decade’s worth of expansion. In particular, the dynamics of this recession present major opportunities for community banks to facilitate a speedy recovery and mitigate its potential severity while serving as an important resource for localities at different stages of the healing process. While the current economic landscape may appear bleak at first sight, the data presents a strong case for cautious optimism as we press forward in these uncertain times in hopes of a brighter tomorrow.  Noah Yosif is ICBA assistant vice president of economic policy and research. As Figure 4 shows, states with a higher share of community banks received more PPP funding during the early stages of the current recession, with the top 10 states able to cover 20% more of their payrolls than the bottom 10 states. In addition, by performing their most basic functions, from accepting deposits to providing loans, community banks have been vital pillars of support to Main Street by facilitating a healthy circulation of capital to keep local economies in operation while social distancing measures have gone into effect. As shown in Figure 5 , community banks posted major gains in deposits and loans during the first three months of this recession. continued from page 11