Ten per cent of the Community Bank branches operated by associates of Bendigo and Adelaide Bank are in negative equity, the bank's chief financial officer, Richard Fennell, told a Macquarie Equities conference on Friday.Fennell said that half of those experiencing losses operated in areas either recently or currently affected by drought.Of 552 branches operated by Bendigo, around 260 are Community Bank branches. (Fennell used this number on Friday, though recent prospectuses for new branches put the number at 270).Two-thirds of Community Banks posted profits in 2010, Fennell said. Nine per cent incurred losses, in some cases because grants exceeded net profit for the year.Of the remaining 25 per cent of Community branches that reported losses, three-quarters were in their first three years of trading and were in line with budget. Most of the remainder were in drought-affected areas.Fennell said 48 per cent paid dividends to shareholders, with 58 per cent of those with a trading history of three years or more paying dividends. The average shareholder yield was 8.4 per cent on the original investment.