2026 ISSUE 3 BUILDING ON THE PAST, BANKING ON THE FUTURE. Markets, Missiles and Monetary Policy What Today’s Headlines Mean for Banks’ 401(k) Plans
©2026 The Independent Community Bankers of Colorado (ICBC) | MBR Connect™. All rights reserved. Independent Report is published four times per year and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of ICBC, its board of directors or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. Independent Report is a collective work, and as such, some articles are submitted by authors who are independent of ICBC. While a firstprint policy is encouraged, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at (801) 676-9722. 6732 W. Coal Mine Ave., #640 • Littleton, CO 80123 • (303) 832-2000 2025-2026 OFFICERS ICBC CHAIRMAN Mike Hurst CEO Del Norte Bank ICBC PRESIDENT Joe Martinez President & CEO San Luis Valley Federal Bank ICBC PRESIDENT-ELECT Jeff Walker President & COO Redstone Bank ICBC ICBA STATE DIRECTOR PJ Wharton President & CEO Yampa Valley Bank ICBC STAFF EXECUTIVE DIRECTOR Mike Van Norstrand mvannorstrand@icbcolo.org ADMINISTRATION DIRECTOR/ TREASURER Maelynn Lewis mlewis@icbcolo.org LEGAL COUNSEL Christian Otteson Partner Otteson Shapiro LLP LOBBYIST Mary Marchun Founding Partner The Capstone Group 2025-2026 DISTRICT DIRECTORS DISTRICT A Kent Jones, President & CEO, Flatirons Bank Jamie Santistevan, COO, Native American Bank Mark Sheeley, President & CEO, RNB State Bank/Front Range State Bank Molly Kufeldt, Executive Vice President & Regional President, InBank DISTRICT B Mark Brase, President, Points West Community Bank Tim Croissant, Market President, Bank of Colorado Travis Goeglein, Senior Vice President, First FarmBank Scott Applegate, President & CEO, Bank of Estes Park DISTRICT C Ben Johnson, President, First National Bank Colorado Miles McClure, CEO, Rocky Mountain Bank & Trust Peter Page, Executive Vice President & COO, Frontier Bank Kathryn Perry, Senior Vice President, Park State Bank & Trust DISTRICT D Dan Ebert, Vice President, Evergreen National Bank John Stelzriede, Market President — Colorado River Region, Alpine Bank Niki Stotler, President & CEO, High Country Bank Chad Zummach, Executive Vice President, Gunnison Bank & Trust ICBC ADVISORY BOARD MEMBERS Eric Budreau Partner Eide Bailly Jim Hall Managing Director Bond & Specialty Insurance — Financial Institutions, Travelers Bill Mitchell CEO Bankers’ Bank of the West Christian Otteson Partner Otteson Shapiro LLP 2 | INDEPENDENT REPORT
21 CONTENTS 7 14 CONNECT Email us mlewis@icbcolo.org Like us on Facebook ICBColo Connect with us ICBColo Follow us on X ICBColo Give us a call (303) 832-2000 Follow us on Instagram ICBColo 2026 PUB. 5 ISSUE 3 4 Support the ICBC’s Associate Members! 5 ICBC Preferred Providers FLOURISH 6 Service: the Heart of the Community Bank Difference By Rebeca Romero Rainey, President and CEO, ICBA FROM THE TOP 7 Redefining Succession as Legacy By Alice P. Frazier, ICBA Chair, President & CEO, Potomac Bank 9 Markets, Missiles and Monetary Policy What Today’s Headlines Mean for Banks’ 401(k) Plans By Isaac Coutier, CPFA, Investment Advisor, Impact Retirement Advisors, ICBC Associate Member 10 Mean Reversion: Bond Yield Relationships Are Looking Familiar, Finally By Jim Reber, Managing Director-ICBA Relations, The Baker Group, ICBC Associate Member 12 5 Ways Financial Institutions Can Create More Value for Small Businesses By Leslie Chaffer, Vice President of Product Management, CSI, ICBC Associate Member 14 Digital Innovations That Enhance Customer Experience Four Competitive Advantages for Financial Institutions By ICI Consulting, ICBC Preferred Provider and ICBC Associate Member 16 The Housing Act’s New Reciprocal Deposit Legislation What It Means for American Banks By Joe Hooker, Chief Sales Officer, IntraFi, ICBC Associate Member 18 What Rising Costs Mean for Financial Institutions in 2026 By Guy Becker, President & CEO, Kristopher James Company, ICBC Associate Member 21 The Future of Deposit Processing How AI Will Transform Bank and Credit Union Operations By Wendi Klein, VP Marketing, Alogent, ICBC Associate Member 22 Developing People Is the Key to Successful Succession Planning By Connie West, Gallup Certified Strengths Coach, High-Performance Coach, Regional Vice President, The James Paul Group, ICBC Associate Member 23 Crypto and Community Banks: Weighing the Opportunity, Cost and Risk By Kurt Leeper, Partner, Otteson Shapiro, ICBC Silver Associate Member INDEPENDENT REPORT | 3
SUPPORT THE ICBC’S ASSOCIATE MEMBERS! ACCOUNTING | COMPLIANCE AntifragileGRC................................. (972)479-5520 Baker Tilly . . . . . . . . . . . . . . . . . . . . . . . . .............(303) 298-9600 EideBaillyLLP.................................. (303)770‑5700 Fortner Bayens PC . . . . . . . . . . . . . . . . . . . . . ...........(303) 296‑6033 Forvis Mazars . . . . . . . . . . . . . . . . . . . . . . ............(303) 861‑4545 PlanteMoran** . . . . . . . . . . . . . . . . . . . . . ............ (303) 740‑9400 Shield Compliance . . . . . . . . . . . . . . . . . . . . ...........(425) 276-8235 ADVERTISING | EQUIPMENT | PRINTING | SUPPLIES Kristopher James Company . . . . . . . . . . . . . . . . . . . . . . . . . (800) 274‑9212 Spry.. .. .. .. .. .. .. .. .. .. .. .. .. ............... (303) 323‑4341 ATM | DATA PROCESSING | EFT | CARD PROCESSING | MERCHANT SERVICES *Bankers’ Bank of the West .. .. .. .. .. .. .. .. ......... (303) 291‑3700 *BluePoint ATM Solutions LLC .. .. .. .. .. .. .. ......... (540) 335‑2848 ComputerServicesInc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . (970)212‑7104 DCI......................................... (620)694-6800 FPSGOLD.. .. .. .. .. .. .. .. .. .. .. .. ............. (801) 201-2525 *IBT Apps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (512) 606‑1100 *ICBA Bancard / TCM Bank .. .. .. .. .. .. .. .. ......... (800) 242‑4770 Jack Henry & Associates . . . . . . . . . . . . . . . . . . ..........(417) 235‑6652 Select Bankcard . . . . . . . . . . . . . . . . . . . . . . ...........(855) 943-5763 SHAZAM . . . . . . . . . . . . . . . . . . . . . . . . . .............(515) 288‑2828 VisaInc... .. .. .. .. .. .. .. .. .. .. .. .............. (415) 238‑3682 AUDIT | EVALUATIONS | LOAN REVIEW SERVICES EideBaillyLLP.................................. (303)770-5700 Edwards&AssociatesLLC. . . . . . . . . . . . . . . . . . . . . . . . . . (505)263-5796 Fortner Bayens P.C. . . . . . . . . . . . . . . . . . . . . ...........(303) 296-6033 CAREER ADVANCEMENT Graduate School of Banking at Colorado . . . . . . . . . . . . . . . . (800) 272‑5138 CONSULTING | HUMAN RESOURCES AND MANAGEMENT | MARKETING | STRATEGIC PLANNING Agora Eversole Marketing Agency . . . . . . . . . . . . . . .......(601) 366-7370 BankStrategiesLLC.............................. (303)291‑3700 (A Bankers’ Bank of the West Bancorp Inc. Subsidiary) DeluxeCorporation...............................(843)997-6253 Expert Business Development . . . . . . . . . . . . . . . . ........(610) 771‑2121 HopkinsLeadership.............................. (225)773-4528 *ICBA CRA Solutions .. .. .. .. .. .. .. .. .. ........... (877) 232-0859 *ICI Consulting Inc. .. .. .. .. .. .. .. .. .. ............ (316) 201‑8590 Impact Retirement Advisors . . . . . . . . . . . . . . . . .........(952) 248-3713 Iskratek Consulting . . . . . . . . . . . . . . . . . . . . ...........(660) 238-0105 TheJamesPaulGroup............................ (877)584‑6468 The NaviTrust Group . . . . . . . . . . . . . . . . . . . . ..........(801) 438-1842 Piper Sandler & Co. . . . . . . . . . . . . . . . . . . . . ...........(415) 978‑5057 *S&P Global .. .. .. .. .. .. .. .. .. .. .. ............. (434) 951‑6948 CORRESPONDENT BANKING SERVICE *Bankers’ Bank of the West .. .. .. .. .. .. .. .. ......... (303) 291‑3700 BellBank.. .. .. .. .. .. .. .. .. .. .. .. .............. (701) 371‑3355 Citizens Bank Farmington . . . . . . . . . . . . . . . . . . .........(505) 599‑0100 FHLBankTopeka.................................(720)212-9873 INTRUSTBank.. .. .. .. .. .. .. .. .. .. .. ............ (800) 732‑5120 PCBB . . . . . . . . . . . . . . . . . . . . . . . . . . ..............(888)399‑1930 TIB — The Independent BankersBank . . . . . . . . . . . . . . . . . . . (972) 650‑6000 CYBERSECURITY | IT CONSULTING AND SERVICES | SECURITY Alarm Detection Systems Inc . . . . . . . . . . . . . . . . .........(720) 594-8330 Alogent...................................... (719)583‑8004 Botdoc.. .. .. .. .. .. .. .. .. .. .. .. ............... (719) 960-4475 CivITas Bank Solutions . . . . . . . . . . . . . . . . . . . ..........(303) 291‑3700 (A Bankers’ Bank of the West Bancorp Inc. Subsidiary) ComputerServicesInc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . (800)545-4274 Cook Solutions Group . . . . . . . . . . . . . . . . . . . ..........(503) 260‑8562 Federal Protection Inc. . . . . . . . . . . . . . . . . . . . ..........(800) 299‑5400 M.R.Solutions.................................. (303)296-3328 RMCyber***................................... (303)721-6131 INSURANCE | BENEFIT SERVICES Bank Compensation Consulting . . . . . . . . . . . . . . . . . . . . . . (303) 482‑1844 CPInsuranceAssociates. . . . . . . . . . . . . . . . . . . . . . . . . . . (325)201-3463 First Insurance Services Inc. . . . . . . . . . . . . . . . . . .........(719) 456‑2303 Haas & Wilkerson . . . . . . . . . . . . . . . . . . . . . ...........(913) 676-9259 *ICBA Reinsurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (888) 790‑6615 Impact Retirement Advisors . . . . . . . . . . . . . . . . . . . . . . . . . (952) 248-3713 NFP.. .. .. .. .. .. .. .. .. .. .. .. .. ............... (496) 252-1037 *Travelers .. .. .. .. .. .. .. .. .. .. .. .............. (720) 200‑8416 INVESTMENTS | FUNDING AND LENDING PARTNERS B:SideCapital.................................. (303)657‑0010 TheBakerGroup................................ (405)415‑7200 *BHG Financial Institutional Network*** .. .. .. .. .. ...... (954) 263‑6399 Citizens Bank Farmington . . . . . . . . . . . . . . . . . . .........(505) 599‑0145 Colorado Enterprise Fund . . . . . . . . . . . . . . . . . . .........(303) 860‑0242 Colorado Housing and Finance Authority . . . . . . . . . . . . . . . . (303) 297‑7329 D.A.Davidson.................................. (303)764‑6000 FHLBank Topeka — Denver Office . . . . . . . . . . . . . . ........(720) 212‑9873 First Bankers’ Banc Securities Inc. (FBBS) . . . . . . . . . . . . ......(720) 709‑7613 GillCapital.................................... (303)296‑6260 *ICBA Mortgage .. .. .. .. .. .. .. .. .. .. ............ (800) 253‑5356 *ICBA Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (800) 422‑6442 IntraFi Network . . . . . . . . . . . . . . . . . . . . . . ............(303) 706‑9265 NorthlandSecuritiesInc. . . . . . . . . . . . . . . . . . . . . . . . . . . . (303)801‑3380 Olsen Palmer LLC . . . . . . . . . . . . . . . . . . . . . ...........(202) 803‑2620 Performance Trust Capital Partners . . . . . . . . . . . . . .......(312) 521-1000 Preferred Lending Partners . . . . . . . . . . . . . . . . .......... (303) 861-4100 RocketPro.. .. .. .. .. .. .. .. .. .. .. .. ............. (704) 650-0622 USDA Rural Development . . . . . . . . . . . . . . . . . . .........(720) 544-2916 Vantage Financial LLC . . . . . . . . . . . . . . . . . . . ..........(763) 213-9015 West Gate Bank Mortgage . . . . . . . . . . . . . . . . . .........(402) 434‑4116 LEGAL SERVICES Alliance Growth Legal Advisors . . . . . . . . . . . . . . . ........(970) 368-0606 Arnold&Porter................................. (303)863‑1000 Godfrey Law Group LLC . . . . . . . . . . . . . . . . . . ..........(303) 802‑6336 Markus Williams Young & Hunsicker LLC . . . . . . . . . . . . . . . . . (303) 830‑0800 Otteson Shapiro LLP (ICBC Counsel) . . . . . . . . . . . . . .......(720) 488‑0220 Spencer Fane LLP . . . . . . . . . . . . . . . . . . . . . ...........(303) 839‑3838 StinsonLLP.. .. .. .. .. .. .. .. .. .. .. .............. (303) 376‑8400 Taft Stettinius & Hollister LLP . . . . . . . . . . . . . . . . .........(303) 297-2900 Womble Bond Dickinson** . . . . . . . . . . . . . . . . . .........(303) 623‑9000 LOAN REVIEW SERVICES EideBaillyLLP.................................. (303)770‑5700 Fortner Bayens PC . . . . . . . . . . . . . . . . . . . . . ...........(303) 296‑6033 ICBC LOBBYING AND PUBLIC RELATIONS The Capstone Group (ICBC Lobbyists) . . . . . . . . . . . . . . . . . . (303) 860‑0555 *ICBC Preferred Providers **Silver Associate Member ***Gold Associate Member 4 | INDEPENDENT REPORT
ICBC PREFERRED PROVIDERS ICBC Preferred Providers are selected by bankers just like you, so give them special consideration when considering their proposals for your bank! To learn more about ICBC’s Preferred Providers, contact the ICBC at (303) 832-2000. Please note: ICBC endorses the listed companies but not all products offered by the company. Contact: Scott Wintenburg | swintenburg@bbwest.com | (303) 291-3700 or (800) 601-8630 Merchant services from Bankers’ Bank of the West help you grow customer relationships with mobile payments technology, competitive unbundled pricing, efficient approvals and startups, responsive support and training. Contact: Keith Gruebel | kgruebel@bhg-inc.com | (954) 263-6399 Creator of the largest community bank loan network in the country. ICBC members can access the BHG Loan Hub, a secure, state-of-art loan delivery platform and the number-one source for professional loans. Contact: Wade Zirkle | wade@bluepointatm.com | (720) 295-9142 Colorado-based BluePoint ATM Solutions provides cost-efficient, reliable, branch and off-site ATM equipment and managed services to community banks across the Mountain West. From equipment sales/leases to custom installations, CIT, and ongoing service and maintenance — BluePoint provides dependable, cost-efficient ATM programs tailored to meet your bank’s needs. Contact: Phil Layher | phil.layher@ibtapps.com | (512) 616-1188 IBT Apps® is an empowering core partner to community banks nationwide, offering end-to-end core and digital banking solutions that meet today’s customer demands. Their adaptable i2Suite banking system enables your bank to streamline operations, control costs and mitigate risks. Transform your bank with the power of one total solution. Contact: solutions.icba.org | (866) 843-4222 The ICBC supports and recommends the following products and services supplied by our national association, the ICBA: ICBA Bankcard and TCM Bank, N.A.; ICBA Compliance & Risk Management; ICBA Mortgage; ICBA Reinsurance; and ICBA Securities. Contact: Lance Tappa | lance.tappa@ici-consulting.com | (414) 255-4944 Since 1994, ICI Consulting has helped banks and credit unions to assess, cost justify, evaluate and convert core processing, digital banking, EFT, lending, document imaging, CRM and branch solutions. Contact: Kyle Norman | kyle.norman@spglobal.com | (719) 661-3560 S&P Global combines exclusive analysis and in-depth data in real time for the banking, financial services and insurance industries. From bank branch data and government assistance programs to executive compensation and league tables, S&P is the final word in business intelligence on financial institutions. Contact: Madeline Dickman | mdickman@travelers.com | (720) 200-8293 Offering a wide range of customized insurance protection, Travelers SelectOne+® for financial institutions is designed to respond to the most recent trends in banking. INDEPENDENT REPORT | 5
FLOURISH In the months that have passed since we came together at ICBA LIVE, I’ve been reflecting on one key sentiment that came across loud and clear: Community banks have a unique and profound impact on the lives of those we serve. At LIVE, retired U.S. Army Staff Sergeant Travis Mills, a quadruple amputee, shared his story of perseverance and courage, inspiring everyone in the room. But an electric current shot through us all when he indicated that the work he does today to support families of military veterans has been made possible by his local community bank. Everyone sitting in the crowd made a connection in real time that the work they do is vital to helping humanity. That truth is reflected in the way in which we conduct business. One of my favorite things to do while traveling is to meet with bankers in their community. The story is the same in every market: Community banks go the extra mile to serve. I recently met with a banker in Colorado who recounted stories of the businesses his bank supported. From the college and hospital to local restaurants and farmers, he knew their histories and current challenges. Community bankers might take this approach for granted, but this is the side of relationship banking that makes the difference. Service: the Heart of the Community Bank Difference By Rebeca Romero Rainey, President and CEO, ICBA The difference is the relationships, the history and the desire to invest and support the long-term viability of the community, one small business at a time. LENDERS OF CHOICE Shortly after this visit in Colorado, I had a meeting with the head of the National Economic Council. We went back to the data: Community banks fund 60% of U.S. small business loans and 80% of the banking industry’s agricultural loans. While this aggregate information tells a story, it doesn’t explain that we do it because it’s what’s right for our communities. That’s why leaders need to hear the stories of community bank service. Hearing them reveals, without a doubt, that community banks are the hearts of their communities, and their communities have their hearts. That love for what we do and who we serve transcends day-to-day business to ensure we make a real difference. At ICBA, this is what we’re fighting for and standing up to support through advocacy, education and innovation. We strive to bring you the solutions that help you make a difference every day. Just as LIVE’s “Anchored in Purpose” theme said, the work community banks do matters, and we must continue amplifying that message for all who need to hear it. 6 | INDEPENDENT REPORT
FROM THE TOP By Alice P. Frazier, ICBA Chair, President & CEO, Potomac Bank In my experience, community banks sell for one of the following reasons: Board succession has not been strategically planned, executive staff and leadership succession have not been strategically planned, or the market has taken a turn. Two of the three focus on preparing bank leaders for the future, making succession planning a critical component of a community bank’s long-term viability. But to do it well, succession planning takes work. It requires hard, transparent discussions with the board and executive staff. It relies on open conversations about retirement horizons, and it means the careful cultivation of the next generation of community bankers. A speaker at last year’s Independent Community Bankers Association of New Mexico annual meeting summed up this concept with a visual: the quarterback backup chart. It showed Patrick Mahomes, the quarterback for the Kansas City Chiefs, and three different backup quarterbacks, along with which skills were necessary for them to cultivate to replace Mahomes. DEVELOPING A LEGACY It’s that level of transparency and thoughtful work that needs to go into succession planning for community banks. We need to equip our teams with the experiences they need to get to the next level. Succession planning is about investing in others, because what we invest in others is the legacy we leave our banks. When we redefine succession planning as creating a legacy in people, it changes how we view it. Our work in cultivating the next generation means that we are building our bench and preparing our backup quarterbacks to get in the game. It’s about being open and strategic in how we ensure the future is secured. The root word of succession is success, which explicitly tells us that it’s our job as leaders to ensure our banks continue to thrive. So, as you read this issue, consider ways you can empower your teams. Get them engaged with ICBA Advocacy activities. Expose them to the sessions offered by ICBA Innovation. Use ICBA Education to support career development planning. Each of these efforts helps to shore up the future of your bank through its people. At the end of the day, instead of thinking about succession planning as a chore, let’s look at it in the context of the legacies we’re leaving. Our job is to develop the people who make our banks flourish today and will ensure our legacy into the future. QUOTE OF THE MONTH “Your legacy is not leaving something for people; it’s leaving something in people.” — Peter Strople Redefining Succession as Legacy INDEPENDENT REPORT | 7
Established in 1980, Bankers’ Bank of the West has been serving community banks for over 45 years as a trusted, non-competing partner, grounded in strong relationships, industry expertise, and a long-term perspective. As the financial landscape continues to evolve, we remain focused on helping our partners stay relevant and competitive through purposeful innovation, operational efficiency, and responsive, experienced support, while staying true to the core values that have guided us since the beginning. EXPERT LOAN REVIEW SERVICES • Independent loan reviews. • Strategic growth consulting. • Helping banks strengthen credit quality, manage risk, and plan confidently for expansion and succession. • Community banks deserve a partner as dependable and resilient as the communities they serve. • Assessing wire transfer risks • Delivering compliant backup solutions. • Trusted support, expert guidance, and service every step of the way. BUSINESS CONTINUITY OPTIONS ASK US ABOUT BRIDGE! Our secure online portal for ACH, wires, reporting, OFAC screening, anomaly detection, SFTP, file transfers, and seven-year archiving. Bill Mitchell BBWest, CEO & Vice Chair Jim Swanson President, Bank Strategies, LLC. Anne Benigsen President, CivITas Bank Solutions, LLC. EST 1980 OVER 45 YEARS OF EXPERTISE We Champion Community Banking! 800-873-4722 | NE: 888-467-5544 | www.bbwest.com • Vulnerability scans. • Penetration testing. • Phishing simulations and IT consulting. • Plus, monitoring and training. • Policy reviews. • Board advisory support to strengthen your bank’s security posture. COMPREHENSIVE CYBERSECURITY SERVICES
Markets, Missiles and Monetary Policy By Isaac Coutier, CPFA, Investment Advisor Impact Retirement Advisors, ICBC Associate Member War overseas. Inflation concerns. Interest rate uncertainty. Rising energy costs. For investors, today’s headlines can feel like a constant stream of competing challenges. Add in questions surrounding tariffs, government spending and the direction of the economy, and it’s easy to understand why many are concerned about the impact on their retirement savings. Despite these concerns, long-term investors should look beyond the headlines and maintain perspective on the bigger picture. The goal remains the same: building a successful retirement over time. Markets will continue to move, but successful investing does not require predicting every storm — it requires a strategy built to navigate changing conditions while keeping long-term goals at the center. Many investors expected a sharper selloff as tensions escalated. Instead, markets have largely absorbed these developments, with major indexes continuing to trade near historically elevated levels. That resilience highlights how markets often look beyond today’s headlines while also reminding investors how quickly conditions can change. OIL STILL MATTERS One of the primary reasons investors are watching developments in the Middle East so closely is the potential impact on global oil markets. Iran sits alongside one of the world’s most strategically important shipping routes, the Strait of Hormuz. Any disruption — or even the possibility of one — can influence global energy prices. Higher oil prices ripple through nearly every part of the economy, increasing transportation costs, manufacturing expenses and ultimately the prices consumers pay. Even if supply isn’t materially disrupted, uncertainty alone is often enough to keep energy markets volatile. WHY THE FEDERAL RESERVE IS IN FOCUS Perhaps the biggest market implication isn’t the conflict itself — it’s what the conflict could mean for inflation and future Federal Reserve policy. Over the past year, investors have been asking when the Federal Reserve will resume lowering interest rates. But as inflation and economic data continue to surprise, investors are beginning to ask a very different question: Could interest rates move higher instead? The Federal Reserve’s primary objective is to maintain stable prices while supporting employment. If inflation continues moving in the wrong direction, the Fed may choose to keep interest rates higher for longer or slow the pace of future rate cuts. Even if the economy itself remains healthy, changing expectations surrounding monetary policy can have a meaningful impact on both stock and bond markets. This is why markets continue to react quickly to inflation reports, employment data and comments from Federal Reserve officials. Investors aren’t simply reacting to today’s numbers — they’re trying to determine what they mean for tomorrow’s interest rates. WHAT THIS MEANS FOR YOUR BANK’S 401(K) PLAN While headlines naturally capture our attention, retirement investing has always been about maintaining discipline through changing market environments. Markets have navigated recessions, banking crises, pandemics, inflation spikes and countless geopolitical events over the decades. Each felt significant in the moment, yet disciplined investors who maintained a long-term perspective were generally rewarded over time. Today’s market environment is no exception. The key isn’t predicting every twist and turn — it’s ensuring your retirement plan is built to navigate uncertainty with confidence. At Impact Retirement Advisors, that’s exactly what we help banks do. Through ongoing investment oversight, fiduciary guidance and regular benchmarking, we help banks keep their retirement plans aligned with long-term objectives, regardless of market conditions. If you’d like a second opinion on your 401(k) plan, we’d welcome the opportunity to review your investment lineup, benchmark your plan against industry peers and identify opportunities to strengthen your retirement program. The views, opinions and content presented are for informational purposes only. The information is not intended to be, and should not be considered as, impartial investment advice or an offering of investment advisory services. The information contained herein may be subject to change at any time without notice. Past performance is not indicative of future results. What Today’s Headlines Mean for Banks’ 401(k) Plans INDEPENDENT REPORT | 9
Mean Reversion: Bond Yield Relationships Are Looking Familiar, Finally I would like to make clear in the title of this column that we’re not talking about anything rude or unfriendly. In fact, you are about to learn just the opposite. It has been many a year since the U.S. bond market’s yield curve has been normally sloped. By “normal,” we mean that the differential in short and long yields (i.e., “2s to 10s”) is around 100 basis points (1%), which has been the average this century. However, a normal yield slope is like a heartbeat: It’s rare that we’re at the average. In fact, the last time the 10-year Treasury yield was 1% higher than the two-year yield was in November 2021. The painful 28-month window where the curve was upside down finally ended in September 2024, and we thought we were going to make a run at an even steeper curve this year. At the moment, we’re stuck in the plus-40 bps range. There is, in fact, a possibility that the Federal Open Market Committee (FOMC) hikes rates later in 2026, which could wipe out any slope altogether. NUMBERS HAVE IMPROVED So, we have some steepness, which fundamentally should help community banks’ net interest margins (NIMs). Using the 600+ banks that utilize The Baker Group for their interest rate risk modeling as a proxy, the industry is effectively insulated against rate shocks. The inverted yield curves of the recent past are evidence that positive slopes simply create pricing power across balance sheets. According to the FDIC, community bank NIMs improved by nearly 50 bps between March 2024 and March 2026 as the upside-down curve era receded into the merciful past. Another piece of this dynamic is that for the first time in four years, yields on Treasury securities across the maturity spectrum are higher than overnight rates. That, too, should create room for margin expansion. It’s intuitive that a two-year Treasury note should yield more than fed funds, but that wasn’t the case between 2023 and 2025. Portfolio managers now have an economic incentive to extend out on the curve and spread products — securities other than Treasuries — to provide a further yield boost. PLANETS AREN’T ALIGNED, YET But let’s not get ahead of ourselves. Yes, the curve has some modest slope, and yes, one can buy a two-year Treasury at a higher yield than sitting in fed funds. But we still aren’t at optimal levels for either. The 2-to-10 slope looks like it may be mired at its current levels until the bond market gets some clarity from the FOMC about its next steps. Also, under new Chairman Kevin Warsh, “clarity” may be hard to By Jim Reber, Managing Director-ICBA Relations The Baker Group, ICBC Associate Member 10 | INDEPENDENT REPORT
come by since he’s suggested that forward guidance may become a precious commodity. Add to that the fact that yield spreads on the products that community banks purchase are not at record levels either. It remains a challenge for C Corps to buy bank-suitable tax-free munis with any spread at all out to the 15-year maturities. (S Corps are another story for another column.) Mortgage-backed securities (MBS) spreads have trended lower since 2023 on most products, which is interesting in that rates have likewise trended lower in that time frame, when usually yield spreads widen. Both munis and MBS have benefited from a general lack of supply, particularly new issue mortgages. LOOKING UP What hasn’t yet been discussed is that nominal rates are still nearly at an 18-year high. And the theme of “reversion” previously mentioned is good news for bond investors. Positive slope, spread between overnights and everything else, and inflation trends that are gaining steam all contribute to the available yield levels. Two more notes about the current financial environment: (1) A friendly reminder that an upwardly shaped curve helps the math work on a bond swap, in which certain securities are simultaneously purchased and sold, and (2) Bank profitability has been solid so far in 2026. As the second half of the year ensues, a “loss-earn back” trade to convert some lower-yielding circa-2021 purchases into much higher-yielding 2026 levels can make sense for a lot of community banks. Your brokers can model all configurations of these trades to quantify the costs/benefits for your management team discussion. Much could happen between now and year-end to weaken the current backdrop, which appears to offer investors reasonable value. One example is persistent inflation. Chairman Warsh’s first meeting included ample acknowledgment that price stability is a higher priority than full employment. Any move closer to rate hikes could cause the yield curve to flatten from here. Nonetheless, the reversion to the longer-term averages in term relationships in the fixed income market has produced current opportunities not seen in years. Nothing mean about that. The Baker Group is ICBA Securities’ exclusively endorsed broker-dealer. INDEPENDENT REPORT | 11
5 Ways Financial Institutions Can Create More Value for Small Businesses By Leslie Chaffer, Vice President of Product Management CSI, ICBC Associate Member Small businesses wear a lot of hats. They want to focus on serving customers and growing their business, not chasing invoices or managing manual tasks. As a result, they’re not just asking, “Where should I bank?” They’re asking, “Who can help me run my business better?” The institutions that answer that question are better positioned to become the trusted partners today’s small businesses need to grow. Here are five ways financial institutions can create more value for their small business customers. 1. HELP BUSINESSES MANAGE CASH FLOW MORE EFFECTIVELY For the majority of small businesses, cash flow is everything. A company may be profitable on paper, but if incoming payments are delayed or outgoing expenses arrive at the wrong time, it can create significant challenges. Consider a contractor waiting on payment from a completed project while payroll and supplier invoices are due at the end of the week. Even if revenue is coming in, a lack of visibility into available funds can make it difficult to plan ahead and make confident decisions. Situations like these are common and can quickly become a source of stress. This is where financial institutions have an opportunity to create real value. When business owners have a clear picture of where their money is going and confidence that funds will be available when needed, they can make decisions faster and plan for growth with greater certainty. The right financial partner helps remove some of the guesswork that comes with managing cash flow, giving owners more time to focus on customers, employees and the future of their company. 2. HELP BUSINESSES MOVE MONEY SAFELY As important as cash flow is, the security of those funds matters just as much. Today’s small businesses move money through more channels than ever before. Payments are sent digitally, invoices arrive electronically, and financial decisions often happen in real time. While that convenience has created new opportunities, it has also introduced new risks. Consider an owner who receives an email that appears to come from a trusted vendor requesting that payment information be updated. Everything looks legitimate until the payment is sent and the funds disappear into a fraudulent account. Situations like these have unfortunately become more common and have lasting financial consequences. In fact, the FBI reported nearly $2.8 billion in losses from business email compromise scams in 2024 alone, making it one of the most financially damaging forms of cyber fraud facing organizations today. For financial institutions, this is an opportunity to help protect customers by identifying suspicious activity and flagging potential threats before they escalate. In doing so, they can provide an added layer of security that organizations can depend on. When customers know their money is protected, they can focus less on managing risk and more on serving clients and pursuing growth opportunities. 3. HELP BUSINESSES SAVE TIME Running a small business means balancing countless responsibilities, and even everyday banking tasks can become time-consuming distractions that pull owners and employees away from more important priorities. This is where financial institutions can become the difference maker their commercial customers are looking for. Something as simple as automating recurring payments can eliminate hours of manual work each month, allowing commercial customers to spend less time managing routine financial tasks and more time focused on tasks that really matter. When routine work is taken off an owner’s plate, it does more than save time. It helps them operate more efficiently and focus on higher-value 12 | INDEPENDENT REPORT
priorities. Over time, those everyday conveniences help make the institution a more valuable part of their success. 4. HELP BUSINESSES GET MORE VALUE FROM THEIR DATA Small businesses generate valuable data every day through payments, account activity and customer transactions. The challenge isn’t collecting that data. It’s turning it into something useful. Most small businesses don’t have the time to sort through spreadsheets or analyze financial trends on their own. They need tools that help them quickly understand what’s happening and identify opportunities to improve performance. Financial institutions can help by giving owners a clearer view of their financial health. Instead of digging through transactions and account balances, they can quickly see how money is coming in, where it’s being spent and whether cash flow is trending in the right direction. Having that information readily available makes it easier to plan ahead and spot potential issues early. 5. HELP BUSINESSES SIMPLIFY OPERATIONS Running a company often means managing multiple systems at once. Banking, accounting, payroll and payments frequently exist in separate platforms, creating unnecessary complexity and making it harder to keep information connected. One way institutions can reduce complexity is by connecting banking services with the tools customers already use, creating a better experience and keeping critical financial information closer together. With fewer disconnected processes to manage, owners can spend less time tracking down information and more time focused on running their company. When more financial activity lives in one place, it’s easier to stay organized and make informed decisions. THE OPPORTUNITY AHEAD FOR FINANCIAL INSTITUTIONS Small businesses have plenty of choices when selecting a primary financial institution. What they’re looking for isn’t necessarily another product, but a partner that helps them save time and operate more efficiently. By providing the right tools and experiences, financial institutions can move beyond transactional relationships and become an essential part of their customers’ long-term success. READY TO STRENGTHEN YOUR SMALL BUSINESS BANKING STRATEGY? Download our Winning with Business Banking e-book by scanning the QR code for practical insights into attracting, retaining and growing commercial relationships in today’s competitive market. https://go.csiweb.com/rs/996-ERF-896/images/CSI_eBook_ BusinessBanking_Bank_RND1.pdf?version=0&_gl=1*1n8tfx8*_gcl_ au*MTQ4MzgzMzc5My4xNzc5ODA4MzE2 INDEPENDENT REPORT | 13
Digital Innovations That Enhance Customer Experience Four Competitive Advantages for Financial Institutions By ICI Consulting ICBC Preferred Provider and ICBC Associate Member Optimizing the customer experience has long been a central goal for every financial institution. In today’s digital-first, mobile-everything world, the definition of a “great experience” has evolved dramatically. Customers no longer compare their bank solely to other banks; they measure their interactions against the frictionless convenience of leading technology companies, retailers and digital platforms. As a result, expectations are rising faster than ever, with customers demanding experiences that are secure, reliable, personalized, seamless and available across every channel. This transformation has placed ease and customer experience at the heart of competitive differentiation. It is no longer enough for banks to simply offer solid products or efficient service. Instead, the financial institutions that thrive are those that can anticipate customer needs, tailor offerings to individual preferences and enable effortless interactions. From opening an account in minutes to receiving proactive insights or accessing real-time mobile support, today’s customers expect their bank to know them, value them and simplify every step of their financial journey. For banks, the ability to deliver a unique and personalized experience yields measurable benefits. It deepens customer loyalty, drives product usage, enhances the bank’s brand and ultimately strengthens profitability. More importantly, it builds trust by showing customers that their bank both understands their needs and prioritizes their goals. As digital and mobile expectations continue to evolve, customer experience will remain the foundation of growth and differentiation. Those institutions that harness digital innovation, data insights and a human-centered approach will not only meet rising expectations but also redefine what it means to deliver truly exceptional banking experiences. Here are four areas of digital innovation that can greatly enhance customer experience for financial institutions. 1. PERSONALIZED EXPERIENCES POWERED BY AI AI enables hyper-personalized recommendations, insights and interactions, leading to a best-in-class experience. Taking advantage of AI-driven personalization can transform your customer experience, evolving it from one-size-fits-all to a tailored financial journey. Investments in this area can give you a competitive edge through personalized offers, predictive insights and conversational AI support. 2. REAL-TIME TECHNOLOGY THAT MEETS NEEDS IN THE MOMENT Adopting real-time processing enables instant account openings, transfers, approvals and alerts. A focus on speed, immediacy and accuracy provides a key ingredient in offering modern banking capabilities to customers. Early adoption opportunities include real-time fraud detection, instant payments, actionable alerts and other financial notifications. 14 | INDEPENDENT REPORT
3. SEAMLESS OMNI-CHANNEL EXPERIENCES Today’s customers expect a seamless, unified experience across online, mobile, in-branch and call center channels. Smooth transitions between channels — like starting a loan online and completing it in person — are now mandatory. Trust, satisfaction and loyalty grow when customers experience consistency and accessibility across every interaction. 4. SELF-SERVICE TOOLS THAT EMPOWER CUSTOMERS Banks need to expand beyond basic account access to advanced digital self-service capabilities. Solutions your institution may want to consider adopting include automated budgeting, loan calculators, account management and dispute resolution functionality. These solutions reduce friction, lower service costs, and increase customer empowerment and independence. CONCLUSION Together, these four pillars create the foundation for an optimized customer journey — one that is seamless, personalized and secure. When these elements interact effectively, they deliver meaningful value to customers while driving measurable business results. The outcome is stronger loyalty, greater product adoption and enhanced profitability. Since 1994, ICI Consulting has helped banks and credit unions to assess, evaluate and convert core processing, artificial intelligence, digital banking, EFT, lending, document imaging, CRM and branch solutions. ICI has performed over 1,385 engagements for more than 885 financial institutions in all 50 states and on four continents. If you wish to schedule a complimentary core pricing analysis or an exploratory discussion, please contact Lance Tappa via email at lance.tappa@ici-consulting.com or by phone at (800) 729-8237. INDEPENDENT REPORT | 15
The Housing Act’s New Reciprocal Deposit Legislation What It Means for American Banks By Joe Hooker, Chief Sales Officer IntraFi, ICBC Associate Member The recently enacted 21st Century ROAD to Housing Act marks a significant shift in how U.S. banks can use reciprocal deposits — an established but increasingly important tool for deposit growth and local lending. WHAT THE LAW CHANGES The new law amends the Federal Deposit Insurance Act to expand the amount of a bank’s reciprocal deposits that can be classified as “nonbrokered,” a designation that generally reflects more stable, relationship-based funding. Under the previous framework, reciprocal deposits counted as nonbrokered were capped at the lesser of 20% of a bank’s total liabilities or $5 billion. This one-size-fits-all limit often constrained banks’ ability to fully leverage reciprocal deposits, even when those funds were tied to long-term customer relationships. The 21st Century ROAD to Housing Act replaces that flat cap with a cumulative, tiered model based on the amount of a bank’s liabilities. Under the new formula, reciprocal deposits can be excluded from brokered deposit treatment up to: • 50% of the first $1 billion in liabilities, plus • 40% of liabilities between $1 billion and $10 billion, plus • 30% of liabilities over $10 billion. The total amount that can be counted as nonbrokered is now capped at $30 billion. For example, under the previous law, a bank with $1.5 billion in liabilities could count $300 million of reciprocal deposits as nonbrokered. The new law increases that number to $700 million. For a bank with $18 billion in liabilities, the amount of reciprocal deposits considered nonbrokered increases from $3.6 billion under the previous law to $6.5 billion. WHY RECIPROCAL DEPOSITS MATTER Ever since reciprocal deposits were invented 25 years ago, they have enabled banks to offer customers access to aggregate FDIC insurance on large balances while maintaining a single banking relationship. When reciprocal deposits are placed across a network of participating banks in increments below the standard $250,000 insurance limit, the placing bank receives matching deposits back. For customers, this structure provides enhanced safety without operational complexity. For banks, it helps attract more large, stable deposits from businesses, municipalities, nonprofits and high-net-worth individuals. Reciprocal deposits are particularly valuable because, as nonbrokered deposits, they behave more like “core” funding — sticky and relationship-driven — rather than rate-sensitive brokered deposits. Policymakers and industry groups have increasingly recognized this distinction, especially after the bank failures of 2023 highlighted the risks associated with uninsured deposits. 16 | INDEPENDENT REPORT
We’re here to help. Reach out today! Juliene Wynn, Director of Lending & Compliance (303) 861-4100 juliene@preferredlendingpartners.com preferredlendingpartners.com COLORADO'S BOUTIQUE SBA 504 LENDER SINCE 1984! Preferred Lending Partners is your creative financing connection — helping small businesses to become fixtures in the communities they serve. IMPACT ON BANKS AND COMMUNITIES By expanding the reciprocal deposit limit, the new law gives banks greater flexibility to strengthen their balance sheets and retain high-value customer relationships. In practical terms, a bank can now hold substantially larger volumes of nonbrokered reciprocal deposits. This has direct implications for local economies. Reciprocal deposits are widely understood to help keep funds within the communities where they originate, supporting lending to small businesses, homeowners and local organizations. Lawmakers have emphasized that the goal of the legislation is to keep deposits local. The new law spurs banks — particularly community and regional institutions — to grow local depositor relationships and deploy more capital within their markets rather than passing on large deposits and losing them to larger institutions or alternative cash management solutions. A SHIFT TOWARD FLEXIBILITY AND RESILIENCE The move to a tiered system reflects a broader regulatory shift toward aligning deposit rules with the realities of modern banking. The prior cap was set at the same limit for all banks regardless of size, while the new framework scales with institutions’ balance sheets. As a result, banks can now use reciprocal deposits at a scale proportionate to their total liabilities, protecting more customers’ large cash balances, improving their competitiveness and aiding liquidity management. The law also extends eligibility to a wider range of well-capitalized banks, further broadening access to this funding source. THE BOTTOM LINE The 21st Century ROAD to Housing Act is a considerable step forward in deposit regulation. By expanding the amount of reciprocal deposits that can be treated as nonbrokered, the law strengthens banks’ ability, in greater volume than before, to: • Attract and retain large, safety-conscious depositors • Enhance funding stability • Support increased lending in local communities At a time when deposit competition remains intense and customers are increasingly focused on safety, reciprocal deposit services have become a critical tool for banks. This legislation ensures they can use that tool more fully — unlocking greater flexibility, stronger relationships and more capital directed toward local economic growth. Deposit placement through ICS and CDARS is subject to the terms, conditions, and disclosures in applicable agreements. IntraFi is not an FDIC-insured bank, and deposit insurance covers the failure of an insured bank. A list identifying IntraFi network banks appears at intrafi.com/ network-banks. Certain conditions must be satisfied for “pass-through” FDIC deposit insurance coverage to apply. INDEPENDENT REPORT | 17
What Rising Costs Mean for Financial Institutions in 2026 By Guy Becker, President & CEO Kristopher James Company, ICBC Associate Member Financial institutions have spent the last several years navigating margin pressure, rising compliance costs, workforce challenges and ongoing technology investments. As a result, operating expenses and efficiency ratios remain under intense scrutiny. Now, another challenge may be emerging. Recent economic data suggest inflationary pressures are beginning to accelerate again, driven largely by rising energy costs and supplier prices across the supply chain. WHAT THE DATA IS TELLING US At Kristopher James Company (KJC), we’re frequently asked where prices are headed. While no one can predict future inflation with certainty, recent CPI, PPI and other inflation indicators show increasing momentum. For financial institutions, this means costs may continue to rise across many everyday categories — from forms and office supplies to marketing materials, promotional products and operational essentials. These increases will likely keep inflation metrics elevated throughout the remainder of the year. WHY OIL PRICES MATTER One of the primary drivers of recent inflationary pressure has been energy. Oil prices climbed significantly during the first half of 2026, increasing transportation, manufacturing, packaging and distribution costs throughout the economy. As those costs rise, suppliers often pass them down the supply chain in the form of higher prices. THE COST MANY INSTITUTIONS OVERLOOK When inflation rises, organizations often focus on product pricing. However, some of the highest costs come from the effort required to manage inflation — finding alternative suppliers, processing additional invoices, managing more vendors and spending valuable staff time on procurement activities. In many cases, these administrative costs can be just as significant as the price increases themselves. WHAT FINANCIAL INSTITUTIONS CAN DO NOW Rather than reacting to future cost increases, institutions can take proactive steps today. Here’s what you can do now: • Review high-spend categories and identify sourcing opportunities. • Evaluate vendor agreements before future price increases occur. • Reduce vendor complexity where possible. • Focus on total procurement costs, not just unit pricing. 18 | INDEPENDENT REPORT
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