Minnesota community banks posted a solid third quarter, with asset quality continuing to improve and profit jumping 30 percent from the same period last year to $394 million.

Nonetheless, lending among Minnesota's community banks remains stagnant amid the subpar economic recovery, according to the Federal Deposit Insurance Corp.'s (FDIC) quarterly report on the nation's banking system Tuesday.

Nationally, bank lending activity has been on the rebound, with the total loan volume up 3.22 percent year-over-year -- its best showing since mid 2008. In Minnesota, by contrast, total loan volume for community banks, at $39.98 billion in the third quarter, shrank 2.4 percent year-over-year.

Part of the lending disparity is because the FDIC's national report includes the country's largest banks, but its Minnesota report does not because the state's largest lenders -- Wells Fargo, U.S. Bank, TCF and BMO Harris -- are chartered elsewhere.