OFF AND RUNNING Community Banks Set for a Robust 2026 By JIM REBER, CPA, CFA, President and CEO, ICBA Securities I’m hopeful that those New Year’s resolutions are intact and having their desired effects. In taking one more look back into 2025, it dawns on me that the further we got into the year, the better the bankers’ comments were about their bank’s performance. The industry seems to be hitting on all cylinders (to use a hackneyed expression), but it seems to be true. Between the continued solid credit quality metrics, reasonable loan demand and an interest rate scenario that looks to favor continued margin expansion, prospects are encouraging for a successful year for community banks. ICBA Successes Recently, ICBA President/CEO Rebeca Romero Rainey and ICBA Chairman Jack Hopkins had a conversation about the state of the industry, and they too talked about about its momentum. Legislation on mortgage “trigger leads,” proposals to lower the leverage ratios for community banks and tax exemptions on 25% of ag and rural lending through the ACRE Act are all going to help profitability. Also, making the 2018 Tax Cuts and Jobs Act marginal tax rates permanent for both C Corps and S Corps has provided clarity about portions of the balance sheet that have tax-effected assets — namely, municipal bonds. There is no debate that the Act has helped community bank earnings, though the composition of high-performance portfolios has shifted away from tax-free into taxable instruments. You can view Rebeca and Jack’s conversation at www.icba.org. 6 In Touch
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