interest on excess reserves held in bankers'banks on a pass - through basis. so i hope that from these examples you see that the interests of community banks have been considered in many aspects of the government's effort to return financial stability. federal reserve initiatives to promote the strength of minority depository institutions recently, the markets have shown signs of modest improvement, suggesting that government support of the financial system is having a positive effect. but the effects of the current recession continue to be seen in the financial performance of banks of all sizes and types. indeed, some banks have not yet made their way across the " bridge to stabilization " that serves as a theme for this conference. like their competitors, minority depository institutions have weakened in the current environment. for example, for the full year 2008, 43 percent of the 217 minority depository institutions reported a loss, resulting in an aggregate return on assets of negative 0. 16 percent. as with other banks, much of this deterioration stemmed from higher loan loss provisions, expanded noninterest expenses, and tighter net interest margins. loan delinquencies also rose for these institutions, producing an average ratio of noncurrent loans to total loans of more than 3 percent. however, despite these pressures, minority depository institutions generally maintained sound capital positions at the end of the first quarter, with a 10. 5 percent average tier 1 leverage ratio, tier 1 risk - based capital of 14. 2 percent, and total risk - based capital ratio of 15. 4 percent. the average reserve for loan losses reached 1. 7 percent of total loans. additional peer group statistics are available on the federal reserve's partnership for progress website at www. fedpartnership. gov. partnership for progress is a federal reserve initiative launched last year in recognition of the importance of healthy minority depository institutions to the overall strength of communities in this country. the program seeks to promote the soundness and success of your institutions by increasing the level of technical assistance and support that we provide to minority depository institutions and de novo banks. since the program was started, management of several state member banks and bank holding companies have contacted the reserve banks directly to provide helpful feedback and suggestions. as part of the partnership for progress program, we have assigned dedicated contacts in each federal reserve district to work with minority - owned and de novo institutions. mike collins, the executive vice president in charge of supervision at the federal reserve bank of philadelphia, who spoke with you yesterday, chairs the program on

support minority institutions. the federal reserve, of course, is mainly known for its efforts in formulating the country's monetary policy. but as this group well knows, the fed also plays an important part in the supervision of financial institutions. it has the primary rule - writing authority for many consumer protection regulations that govern a wide range of financial activities. it provides liquidity to the financial system. and, as has been seen in the current crisis, in times of financial stress the federal reserve joins with other government agencies to support financial stability. as community bankers, you understand how intertwined the strength of your institution is with the performance of your community's economy. the financial crisis has shown how true that is whether the economies and institutions are local, national, or even global. i consider it my role to bring a banking perspective to the deliberations and decisions of the board, with a hands - on understanding of the impact of public policy on banking and the impact of banking on the economy. in order to keep up with the latest issues and concerns in the banking community, i work hard to stay in close touch with bankers representing a wide range of banking markets, charters, and geographic locations. while i understand the community banking part of your business, i likely do not have a full appreciation of all the challenges you face as minority bankers. so i am eager to hear your thoughts today and to continue the conversation in the months and years ahead. i thought i would begin today with some of the topics that i hear about most from bankers. then i will talk a bit about some of the efforts that have been taken to repair the financial system, with particular emphasis on the ways in which these actions might impact your banks and the broader economy. i plan to conclude by briefly discussing the current condition of minority banks and highlighting the importance of your lending activities to our economy. and then i would like to hear from you. community banker concerns overwhelmingly, the biggest concern i am hearing about these days is the public perception of banks and bankers. clearly, the public is angry. they are angry at banks and, just as much, at bank regulators. they are angry about bailouts. they are angry about bad loans. they are angry about big salaries. they are angry because banks are not lending. and they are angry about high rates and fees. community bankers are angry, too. they are angry because they did not ask for or receive any bailouts. they did not make the subprime loans