WINTER 2026 With Financial Support From MIB and Its Member Banks, Montana Heritage Center Opens to Public After 20-Year Journey PG. 12 Cushing Terrell The Heritage Center Architects PG. 14
26 14 12 4 PRESIDENT’S MESSAGE Your Involvement Matters By Loren Brown, President, MIB 6 EXECUTIVE DIRECTOR’S MESSAGE Building on Momentum Advocacy, Education and Opportunity in 2026 By Shane Scanlon, Executive Director, MIB 8 FLOURISH Marching Into 2026 on the Advocacy Frontline By Rebeca Romero Rainey, President and CEO, ICBA 10 FROM THE TOP It’s a Wonderful (Community Banking) Life By Jack E. Hopkins, Chairman, ICBA 12 Montana Heritage Center Opens to Public After 20-Year Journey 14 MIB FEATURED ASSOCIATE MEMBER Cushing Terrell The Architects Behind the Montana Heritage Center 16 Finding Common Ground on Deposit Insurance Reform Community Bankers Share Common Goals for Protecting Depositors By Jenna Burke, Executive Vice President and General Counsel for Government Relations and Public Policy, ICBA 19 2026 MIB Convention and Trade Show July 22-24, 2026 20 Off and Running Community Banks Set for a Robust 2026 By Jim Reber, CPA, CFA, President and CEO, ICBA Securities 22 Compliance Q&A By Bill Showalter, Senior Consultant, Young & Associates Inc. 24 We’re Making Progress in the Fight Against Fraud By Scott Anchin, Vice President of Senior Operational Risk and Payments Policy, ICBA 25 Main Street Capital Access (“Main Street”) Act 26 PORTFOLIO MANAGEMENT It’s Time To Hit the Weights By Jim Reber, CPA, CFA, President and CEO, ICBA Securities 28 2025 MIB Membership Directory 28 MIB Associate Member Banks 29 MIB Associate Member Resource Guide 30 Bank Training Webinars Contents WINTER 2026 2026 MIB EXECUTIVE OFFICERS Loren Brown, President Ascent Bank, Helena lbrown@ascentbank.com Amber Brown, Vice President Peoples Bank of Deer Lodge abrown@pbdl.net Clinton Gerst, Secretary Bank of Bozeman cgerst@bankofbozeman.com Laura Clark, Treasurer Opportunity Bank lclark@oppbank.com Tim Schreiber, Immediate Past President Farmers State Bank tims@farmersebank.com Kenny Martin, ICBA State Director Independence Bank, Helena kennym@ibyourbank.com 2026 MIB BOARD OF DIRECTORS Amanda Burgess Madison Valley Bank, Ennis Tom Christnacht First Security Bank of Deer Lodge Bill Coffee Stockman Bank, Miles City Daniel Day Bank of Montana, Missoula Shawn Dutton First Security Bank of Roundup Mike Hawthorne First Montana Bank, Missoula Logan Hensley Valley Bank of Kalispell Brice Kluth First State Bank of Shelby Scott Mizner American Bank, Bozeman Joel Rosenberg Three Rivers Bank of Montana, Kalispell Andrew West Eagle Bank, Polson Phil Willett Pioneer Federal Savings and Loan, Dillon ASSOCIATE BOARD MEMBER Ryan Fritz Citizens Alliance Bank rfritz@citizensalliancebank.com MIB STAFF Shane Scanlon, Executive Director Montana Independent Bankers shane@mibonline.org ©2026 The Montana Independent Bankers Association (MIB) | Memberlink Solutions DBA The newsLINK Group LLC. All rights reserved. Community Banker is published four times per year by The newsLINK Group LLC for MIB 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 MIB, 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. Community Banker is a collective work, and as such, some articles are submitted by authors who are independent of MIB. While a first‑print 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 (855) 747-4003. MONTANA INDEPENDENT BANKERS 1812 11th Ave. PO Box 4893 Helena, MT 59604 (406) 449-7444 shane@mibonline.org mibonline.org Community Banker 3
Your Involvement Matters PRESIDENT’S MESSAGE LOREN BROWN President, MIB Hello, my friends, Winter in Montana usually brings a slower pace, but this year it has not felt slow at all. Despite an incredibly mild winter, I have managed to spend plenty of time skiing, snowmobiling and snow biking, taking advantage of every opportunity to be outside. The warm temperatures and clear days have even allowed me to sneak in a couple of BASE jumping trips, something that does not normally make it onto my winter calendar. Time outdoors gives me space to think, and lately I have found myself thinking less about where community banking has been and more about where it is going next. As we move through the beginning of 2026, momentum matters. Community banking does not move forward by accident. It moves forward because people show up, engage and are willing to invest their time and energy into something bigger than their own bank. That mindset will be especially important in the year ahead. One of the best ways to step outside our normal routines and gain perspective is by connecting with community bankers from across the country. ICBA LIVE will be held March 6-9 in San Diego, California, and it presents a great opportunity to do exactly that. While timing may be tight for some to make travel plans, it is still worth mentioning in case you can make it. Every time I attend ICBA LIVE, I return home with new ideas, renewed energy, and deeper relationships that make me a better banker back in Montana. It is valuable to be reminded that while our challenges may feel local, many of them are shared nationwide, and community bankers across the country are finding thoughtful and practical ways to meet them. As worthwhile as ICBA LIVE is, the event I want to emphasize most is the ICBA Capital Summit, which will take place May 4-7 in Washington, D.C. This event gives us the opportunity to sit down face to face with our elected officials, explain why community banking matters and how decisions made in Washington affect the communities we serve every day. I know traveling to D.C. can feel intimidating, especially if you have never attended the Capital Summit before. You may think you need to be an expert on legislation or policy to participate, but that’s not the case. What makes the greatest impact are real stories from Montana community bankers. When we go together as members of the MIB, we bring firsthand examples of how community banks support small businesses, agriculture, housing and local economies across our state. We make a difference by sharing what works, what doesn’t, and what unintended consequences look like when policies are written without community banks in mind. We have seen firsthand that this engagement matters. Recent legislative successes did not happen by chance. They happened because we showed up, shared our experiences and spoke with a unified voice. Our collective efforts as Montana bankers made a difference, and our congressional delegation listened. That is something we should continue to build on, and I would love to see even more Montana bankers join us in Washington this year. To help make that possible, the MIB offers a scholarship for first-time attendees to the ICBA Capital Summit. If you have ever considered attending, I encourage you to take advantage of this opportunity and consider joining us. This is one of the most meaningful ways you can engage on behalf of community banking, both for your bank and for our industry as a whole. Another area where we are clearly building momentum is education and workforce development. One of the initiatives I am most 4 Community Banker
excited about is the Fundamentals of Banking Course developed in partnership with Opportunity Bank and Helena College. The first session was well received, with 13 participants completing the course from several community banks across the state. Early feedback confirmed that the material is practical, engaging and helpful in building a solid understanding of the banking industry. The second session is already underway, and interest continues to grow. There is real demand for accessible, Montana-based banking education, not just for new employees, but for students who may be considering community banking as a career. Looking ahead, I encourage you to consider enrolling employees in future sessions and helping to spread the word about upcoming offerings. This is an investment in our future workforce and in the long-term strength of community banking in Montana. All of these efforts — advocacy, education and national engagement — tie back to the same idea: Community banking remains strong because people care enough to participate. Montana Independent Bankers provides the platform, but our impact is driven entirely by our members. Whether that means attending an event, advocating in D.C., enrolling an employee in a training program or simply reaching out to share ideas, your involvement matters. As we move through winter and into spring, I encourage each of you to lean forward in making your bank and our communities better. Say yes to opportunities that stretch you a bit. Bring a colleague with you to an MIB event or consider attending the Capital Summit for the first time. These are the moments where momentum is built, not just for our association, but for community banking in Montana. Thank you, as always, for your commitment to community banking and to the communities we are privileged to serve. I look forward to seeing many of you in the months ahead and continuing this important work together in 2026. Looking forward to the future with my fellow community bankers, Loren Community Banker 5
Building on Momentum EXECUTIVE DIRECTOR’S MESSAGE SHANE SCANLON Executive Director, MIB happy New Year! It’s hard to believe that 2026 is already here. As I reflect on the past year, I’m reminded of what a successful team we are due to the commitment and dedication each of you brings as members of the Montana Independent Bankers. Between a successful legislative session, the honor of serving as the new executive director of the association, an outstanding annual convention and the launch of our Banking Course partnership with Helena College, we truly hit the ground running in 2025. I am extremely proud of all that we have accomplished together. Now that 2026 is underway, we’re jumping right in, and I’m thrilled about what the year ahead will bring. There are incredible opportunities in store for all of us. MIB/MSU COMMUNITY BANKING NETWORKING NIGHT We were thrilled to partner with Montana State University (MSU) for our Community Banking Networking Night on Wednesday, Jan. 28, 2026, from 5-7 p.m. at Jabs Hall. Several years ago, MIB made it a priority to provide seed funding to support the community banking program at MSU, with a focus on internships, curriculum development, scholarships, guest speakers and industry events. These efforts help promote the vital role community banking plays in our communities and highlight the career pathways available to students. This networking event provided our member banks with an excellent opportunity to connect with students interested in pursuing careers in banking. The event was informal and designed to foster meaningful conversations about career opportunities and ways students can get involved in our industry. If you would like more information about future networking opportunities, please contact me at shane@mibonline.org. FUNDAMENTALS OF BANKING COURSE We are very excited by the strong response to our first offering of the Fundamentals of Banking Course this past fall. The feedback and support for the course were tremendous. As a reminder, this course is offered quarterly throughout the year. It is the same course each time, simply offered at different points to accommodate varying schedules. The current session is running from Jan. 26 to March 6, 2026. The next session will be offered from April 27 to June 5. Whether you’re a seasoned banker or a new employee, we strongly encourage participation. We’ve seen a great response from those who completed the first session. One of the best aspects of the course is its flexibility — it’s fully online and designed to fit your schedule. Participants typically dedicate just a few hours each week to completing the coursework and assignments. If you’re interested in registering, please do so by visiting www.mibonline.org/bankingcourse. MAIN STREET CAPITAL ACCESS ACT (H.R. 6955) During the first week of January, House Financial Services Committee Chairman French Hill (AR-02) and Subcommittee on Financial Institutions Chairman Andy Barr (KY-06) unveiled their highly anticipated community banking package, H.R. 6955, the Main Street Capital Access Act. This important legislation includes several long-sought provisions aimed at spurring local bank formation and ensuring community banks are well-positioned to serve Main Street small businesses and families. In the announcement, Chairman Hill stated: “As a former community banker, I know firsthand the important role community banks play in driving America’s economic engine and helping Main Street grow and thrive. Advocacy, Education and Opportunity in 2026 6 Community Banker
Over the past year, the Subcommittee on Financial Institutions, under Chair Barr’s leadership, has worked tirelessly to examine outdated regulations, listen directly to small businesses, and confront barriers to capital access for small and mid-sized banks. I am proud to introduce the Main Street Capital Access Act to reinvigorate community banking and bring common sense back to Main Street.” Below is ICBA’s summary of key provisions in the bill: • Tailors regulations to the lower risk profile of community banks • Eases excessive capital requirements • Supports the formation of new community banks • Ensures fair and consistent agency examinations • Raises thresholds for holding custodial and reciprocal deposits • Requires appointment of an FDIC board member with experience in small depository institutions • Modernizes the Federal Reserve’s discount window lending programs • Provides relief at the holding company level • Promotes responsible bank-fintech partnerships GENIUS ACT At the time of writing, we are awaiting the Senate Banking Committee’s forthcoming markup regarding broader market structure reforms. While some progress has been made on unresolved issues stemming from the GENIUS Act, one of the most critical remaining questions involves the offering of “interest,” “rewards” or “yields” on payment stablecoins. We have been closely monitoring these discussions. To underscore the stakes, an ICBA analysis found that allowing interest, yield or rewards on stablecoin holdings would reduce community bank lending by $850 billion, driven by a $1.3 trillion decline in industry deposits over the long term. It is essential that our Congressional delegation hears directly from you. Please reach out if you haven’t done so already. Regardless of the outcome of the markup, there is still a long road ahead, and your voice matters. It’s critical that our leaders understand how this could significantly drain community bank deposits and limit credit availability. We must do everything possible to ensure this is adequately addressed, protecting our communities, families and Main Street small businesses. May each of you have a wonderful start to 2026. PEOPLE. TEAMWORK. PASSION. OPPORTUNITY BANK MISSOULA BROADWAY 406.443.2340 cwg-architects.com 650 Power St. Helena, MT Strong foundations for your future. Innovating Montana financial institutions for over 65 years. Community Banker 7
Marching Into 2026 on the Advocacy Frontline FLOURISH REBECA ROMERO RAINEY President and CEO, ICBA looking back on 2025, we have advocacy successes to celebrate. From tax reform and the ACRE tax deduction for interest earned on agricultural real estate loans to President Donald Trump signing into law legislation to bar credit reporting agencies from selling “trigger leads” when consumers apply for a residential mortgage, we have seen developments that signal a deeper understanding of the role community banks play. We’ve also witnessed a rising awareness of the ways community banks differ from other financial institutions. Rule writing that promotes a more level playing field has begun to emerge, and reforms at the banking agencies and the Consumer Financial Protection Bureau are more accurately addressing the unique role community banks play in the financial services ecosystem. These and other wins mean our message is resonating in Washington and beyond. But we are far from done. LET’S DIVE DEEPER These wins are only the tip of the iceberg; there’s a whole foundation of issues that we need to dive deeper into to address. That’s why we implore you to get involved in our advocacy efforts. When you speak up on behalf of community bankers, you truly make an impact. For instance, on trigger leads, I heard from a bank leader who said he had a residential lender in the bank who was appalled at what was happening. This lender became involved with ICBA, attended ICBA’s Capital Summit and met with her legislators to discuss the issue. As a result, she helped resolve the issue, in part because she took the time to speak up. Now she has shared with me that she’ll be a community bank advocate for life. PUSHING INTO THE FUTURE As 2026 gets underway, we should take a moment to reflect with pride on our successes, but then we must move on to what’s next. We cannot and will not let up on the pressure we must exert on policymakers to ensure we have a level playing field to better support our communities. We must lean in further and harder to represent the industry. In a world where everyone wants to call themselves a bank, we must ensure that legislators and regulators understand what makes community banks different. We need you to engage and become even bigger advocates to ensure that all our communities have access to the financial services they deserve. We look forward to seeing you in the starting lineup in the weeks to come. On behalf of everyone at ICBA, I wish you a prosperous start to the new year. 8 Community Banker
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It’s a Wonderful (Community Banking) Life FROM THE TOP while I may be biased, I believe that being a community banker is the best profession there is. There’s just something about watching your customers realize their dreams — whether buying their first home, opening a small business or starting their kid’s college fund — that is second to none. Every day, we get to make an important contribution to the lives and happiness of those we serve, and that’s a unique gift. But that feeling is mutual. I have had customers come up and thank me publicly for helping them out. For example, one time I was out in our local mall, and a contractor whom the bank had helped came up and introduced me to his daughter, saying, “Without Jack and his bank, we wouldn’t have the nice things we have now.” It was a moving experience and one that makes me honored to be part of this industry. JACK E. HOPKINS Chairman, ICBA MY TOP 3 Best things about working at a community bank: 1. The customers 2. The employees 3. The communities we serve THE EMPLOYEE EXPERIENCE That sense of community extends to our employees as well. We take a very family-oriented approach to the work environment. We want our employees to feel like we are their second family, and we want them to feel the depth of commitment that we have to our community. So, we encourage them to serve on nonprofit boards, school boards and other opportunities to be an integral part of the great people we serve. At some point, every community bank employee comes to the realization that small businesses are engines of the economy, and community banks are the gasoline. They realize that what they are doing makes their community a better place to live, work and do business. In fact, a while back, we recruited a commercial lender from one of the larger banks in town. She decided to come work for us with the stipulation that she’d only stay five years and then take an early retirement. Well, 15 years later, at her retirement celebration, she told us that she wished she’d come to work for us long before she did because working in community banking gave her the best 15 years of her career. So as you reflect on the past year, take a minute to appreciate all those ways you have served your community. Recognize that every time we are able to help a customer, we’re empowering them to fulfill their dreams, a feat not many other professions can claim. Coming from that perspective, I guess what they say is true: As community bankers, we really do have a wonderful life. I hope you and yours had the very happiest of holiday seasons! Jack E. Hopkins is president and CEO of CorTrust Bank in Sioux Falls, South Dakota. 10 Community Banker
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MONTANA HERITAGE CENTER Opens to Public After 20-Year Journey the Montana Heritage Center officially welcomed the public on Dec. 3, following a ribbon-cutting ceremony on Dec. 2 that marked the completion of a 20-year vision and $107 million investment in preserving Montana’s cultural heritage. Hundreds gathered for the ribbon-cutting ceremony, which featured Montana Governor Greg Gianforte, major donors Dennis Washington and Norm Asbjornson, Montana Historical Society Director Molly Kruckenberg and Board President Tim Fox. The event celebrated both the world-class facility and the successful conclusion of a $60 million private fundraising campaign supported by more than 1,300 donors worldwide. “This project became a reality because Montanans and supporters worldwide understood the importance of investing in our heritage,” said Kruckenberg. “The Montana Heritage Center gives our state’s 12 Community Banker
extraordinary stories the home they deserve.” The center combines a new 70,000-square-foot addition with the completely renovated 95,000-square-foot Veterans and Pioneers Historic Building. Highlights include: • The Homeland Gallery: A circular journey through Montana’s history from the Ice Age to today, featuring 10 thematic zones and immersive experiences like a replica mine shaft elevator that recreates descending into a 1920s Butte mine. • Expanded Charles M. Russell Gallery: Nearly three times larger than before, showcasing the legendary Western artist’s masterworks. • Changing Gallery: A flexible space, currently featuring the Poindexter Collection of Modern Art. • Norm’s Café: Operated by Helena’s The Dive Bakery, serving fresh baked goods and sandwiches. • The Gift Shop: Offering Montana and Indigenous-made goods, souvenirs and Western history books. The project was funded through a unique partnership: $60 million in private donations, $41.5 million in state funding and $5.5 million in bonds. No property taxes were used for the project. MIB was one of the proud sponsors of this project. “Our goal is to provide curated, educational experiences for those who wish to learn the deeper story,” said Darby Bramble, education officer with the Montana Historical Society. “We want to offer students and lifelong learners the opportunity to enrich their trip to Helena.” To plan your visit and learn more about the Montana Heritage Center, visit mths.mt.gov or contact mths@mt.gov. Community Banker 13
MIB FEATURED ASSOCIATE MEMBER The Architects Behind the Montana Heritage Center more than 20 years in the making, the $107 million Montana Heritage Center expansion and renovation project has resulted in a state-of-the-art facility that houses the state’s historic collections and resources, serving as a place for learning and discovery. The Montana Heritage Center expansion and renovation were designed by MIB Associate Member Cushing Terrell, under the direction of principal architects David Koel, Anthony Houtz and Martin Byrnes. The goal of the project was to “preserve the past, share our stories and inspire exploration.” The project nearly doubled the size of the existing building, adding 66,000 square feet of new space, as well as exterior and interior renovations to 66,995 square feet of the existing 1952 Veterans and Pioneers Memorial Building. The design seamlessly melds old and new, utilizing the space between the two structures to create a dramatic entry that connects the two facilities. 14 Community Banker
of the building shell, using different materials to provide varying degrees of warmth and texture,” said David Koel, the design director at Cushing Terrell. The landscape design continues the sense of exploration with features and plantings that mimic (on a micro scale) the journey from the plains and grasslands to the foothills and forests, and finally to mountain landscapes. Linking it all together is a river-like trail that flows from one ecosystem to the next. The design concept for the Montana Heritage Center is intended to convey the sense that nature is a driving force behind why people reside in the state. The building’s exterior represents the diverse and ever-changing Montana landscape, the backdrop for the lives of its residents. “We hope the exterior environment provides visitors an opportunity to feel an intimate connection to the spectacular Montana landscape and the people who have lived here over the generations,” said Wes Baumgartner, landscape architect at Cushing Terrell. From the inside, the building is a vessel that preserves and highlights the remarkable stories of Montana’s people. With a commitment to sustainability and creating healthy spaces, the project is pursuing USGBC LEED and IWBI WELL certifications. Offering a wide range of commercial design, architecture and engineering services and with offices in Billings, Bozeman, Great Falls, Helena, Kalispell, Missoula and Whitefish, MIB is proud to count Cushing Terrell among its Associate Members. “The vision for who we can be in the future really has also been built into this process, bringing together diverse voices from across our state from east and west, north and south, our Tribal Nations, men and women, young and old — it will be reflected right here,” said Governor Steve Bullock at the ground blessing ceremony. “This building design also looks to the future by incorporating sustainable features that will showcase the ingenuity and the values that make Montana such a special place.” Taking inspiration from the state’s geology, the new building appears to emerge from the earth, symbolically referencing the Lewis Overthrust, the geophysical collision of tectonic plates that drove one plate over another and helped to define Montana’s landscape. Built of the same sandstone as the historic structure, the new building features subtle patterning incised into the rock. “The sun plays an important role with shadows rippling across the landscape at different times of day, and we wanted to do something similar with the design Community Banker 15
the bank failures of 2023 renewed national attention on how federal deposit insurance builds confidence in the banking system. Those events reminded bankers and policymakers that trust matters most when uncertainty rises. For community banks, the message was clear: The system works, but it needs to keep pace with modern-day risks, such as social media-fueled speculation and real-time deposit runs, to protect the customers who depend on it every day. As lawmakers review possible updates to the deposit insurance framework, ICBA members are united by the shared goals of protecting depositors and keeping community banks at the center of reform efforts. SETTING THE STAGE FOR REFORM Deposit insurance has been a key policy focus for ICBA this year. ICBA’s Deposit Insurance Working Group (a subcommittee of the Safety and Soundness Committee) has been reviewing reform proposals from the FDIC, policymakers and other stakeholders to gauge their effects on community banks. The group’s goal is to make recommendations for reform that will promote depositor confidence in community banks, avoid reinforcing too-big-to-fail banks and keep the system fair and cost-effective for smaller institutions. Members of the working group are evaluating options for expanding coverage, considering how proposed changes could affect assessments and reviewing how potential changes could influence depositor behavior during future periods of market stress. Their goal is to inform advocacy with practical input that reflects the realities of community banking and ultimately helps guide smart, balanced reform. TURNING PRINCIPLES INTO POLICY In October, ICBA released principles for deposit insurance reform based on the group’s work. The principles contemplate a range of reform proposals now under consideration, encouraging lawmakers to: • Promote depositor confidence in community banks to prevent deposit flight to too-big-to-fail banks. • Curb the implicit too-big-to-fail government guarantee. • Control the cost of deposit insurance for community banks. • Provide increased coverage for uninsured deposits. • Expand the FDIC’s ability to promptly protect community banks and their customers during crises. • Ensure the bank-funded deposit insurance fund (DIF) is not used to bail out or protect nonbanks. ICBA’s principles are designed to ensure deposit insurance reforms are built on lessons learned from prior events. For example, during the large bank failures of 2023, community bankers learned that small-business customers were, in some cases, advised to transfer deposits to too-big-to-fail banks to seek perceived safety under these institutions’ implicit government guarantee. As such, the principles suggest lawmakers protect, at the very least, transaction accounts for small businesses, municipalities and nonprofit organizations to ensure these depositors are not incentivized to leave their preferred community bank due to deposit insurance limits. Additionally, community bankers learned during the Great Recession that the FDIC may levy drastic procyclical assessments. To avoid these outcomes, the principles suggest lawmakers provide consistent and predictable assessments for community banks, especially during times of non-stress, to ensure the DIF is healthy. The principles also suggest lawmakers limit the FDIC’s ability to increase deposit insurance premiums for community banks, either through base increases or special assessments. FINDING COMMON GROUND on Deposit Insurance Reform Community Bankers Share Common Goals for Protecting Depositors By JENNA BURKE, Executive Vice President and General Counsel for Government Relations and Public Policy, ICBA 16 Community Banker
Community bankers have also learned that emergency measures, like the 2008 Transaction Account Guarantee program, work best when the FDIC can quickly implement these programs without first obtaining consent from Congress. As such, the principles suggest that lawmakers provide the FDIC with unencumbered authority to establish deposit insurance programs, thereby providing stability during times of crisis, and to promote changes to the least-cost resolution framework that allow the FDIC to select bids that protect all depositors, including uninsured depositors. LEGISLATIVE PROPOSALS TO REFORM DEPOSIT INSURANCE Recent developments in Congress regarding these priorities include the Main Street Depositor Protection Act (S. 2999), a bipartisan bill introduced by Sens. Bill Hagerty (R-Tenn.) and Angela Alsobrooks (D-Md.) to establish a permanent framework for deposit insurance reform and increase coverage to $10 million for transaction accounts. The proposal protects small business payroll accounts, which often exceed the current $250,000 limit. It also shields community banks with assets under $10 billion from special assessments or higher base deposit insurance premiums during a 10-year transition period. The bill builds on the FDIC’s earlier recommendations, which outlined several reform options but lent preference to targeted coverage reforms. It also establishes a solid starting point for broader discussions on how to modernize deposit insurance while keeping costs manageable for community banks. The House Financial Services Committee passed a separate bill (H.R. 3234), led by House majority whip Tom Emmer (R-Minn.) and Rep. Joyce Beatty (D-Ohio), that would raise the percentage threshold of reciprocal deposits that a bank may hold without being considered brokered. H.R. 3234 would allow community banks to rely more heavily on reciprocal deposits to achieve higher aggregate levels of deposit insurance coverage. The committee also passed the Community Bank Deposit Access Act of 2025 (H.R. 5317), Chairman French Hill’s (R-Ark.) bill to allow custodial deposits to be held by community banks without being considered brokered deposits, provided the custodial deposits do not exceed 20% of the banks’ total liabilities. And earlier this year, committee ranking member Maxine Waters (D-Calif.) reintroduced a bill, H.R. 4551, to update the deposit insurance framework for business payment accounts and enhance emergency tools for the FDIC to use in future crises. LOOKING AT LONG-TERM STABILITY Deposit insurance reforms will require thoughtful collaboration across the industry. While approaches may differ, community banks need a clear voice in the process. As these discussions move forward, ICBA will work to ensure policymakers keep community banks’ unique role front and center. Jenna Burke is ICBA’s executive vice president and general counsel for government relations and public policy. As lawmakers review possible updates to the deposit insurance framework, ICBA members are united by the shared goals of protecting depositors and keeping community banks at the center of reform efforts. Community Banker 17
MARCH 6-9, 2026 San Diego Convention Center Community. Learning. Innovation. Discover What Makes ICBA LIVE Unforgettable San Diego sets the stage for the largest gathering of community bankers in the world. This is the event where connections are made, ideas are sparked, and strategies are shaped. From powerful keynote speakers and immersive learning labs to high-energy networking events and cutting-edge fintech showcases, ICBA LIVE offers something for every attendee. Register Today At icba.org/live
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 In December, 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 the momentum in the industry. 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. OFF and RUNNING JIM REBER, CPA, CFA President and CEO, ICBA Securities Community Banks Set for a Robust 2026 20 Community Banker
BOND PORTFOLIOS ARE HELPING It was documented here last year that portfolio yields are at a many-year high, thanks to the harsh doses of interest rate therapy in 2022-2023, and the slow-to-recede levels of market rates ever since. Community bankers continue to say they’re able to roll out of bonds yielding 1% or less that are finally, mercifully maturing, and whatever the proceeds are used for, net interest margins are improved. Which brings up the second half of this NIM equation. Deposits grew at community banks by about 4% last year, which is near the long-term run rate, and costs of funds have retreated in the past 18 months. Industry-wide, FDIC calculated community bank COFs have fallen by about 30 basis points (0.30%) since mid-2024. The net margin between bond portfolio yields and costs of funds is now over 1% for the first time in about three years. YIELD CURVE THOUGHTS Yes Montana, there is a Santa Claus. The same is true for the other 49 states and the District of Columbia. For community banks, it came in 2025 in the form of a steep(er) interest rate curve. We closed out the year with the “2s and 10s” spread around 67 basis points (0.67%), which is the best we’ve seen going back four long years. Recall too that the average slope for the full 21st century so far has been right at 100 basis points, and it’s entirely possible we’ll get there sometime this year. Steeper yield curves have all sorts of latent and tangible benefits for the banking industry. The most obvious is that managers can more properly price relative risk into the balance sheets. Thirty-year mortgages are supposed to be priced higher than 15-year mortgages. A 10-year municipal bond is supposed to have a higher yield than a seven-year. And a 36-month CD is supposed to pay more than a 24-month. All those notions were set on their heads during the two-plus-year stretch from 2022-2024 when yield curves were upside down. Banking fundamentals, hopefully, will prevail this year, which can only mean more profitability. BOND SWAP PROSPECTS Commensurate with the positively sloped yield curve are opportunities for actively managing the bond portfolio. One strategy is to sell certain securities and simultaneously purchase others in a “bond swap.” Lately, since most positions are still underwater, bonds have been sold at losses, with the improved reinvestment yields making up the ground in less time than the remaining average lives. This strategy is known as “loss-earnback.” Two pieces of good news: first, early in the year is a popular time to execute these bond swaps, for the simple reason that the bank has a full year to enjoy the higher yields with which to eat away at the realized loss. Secondly, the steeper the yield curve, the less extension risk needed to make the bond math work. So my suggestion is to work with your brokers to model such potential trades, and be sure to document your objectives and rationales. And let me remind the readers that the positive forecast for industry profits might make such loss-earnbacks more tenable. Lots to like here as we embark on an ambitious 2026. I look forward to seeing many of you at ICBA LIVE, March 6-9, in sunny (and warm) San Diego. For more information, visit www.icba.org/icba-live. Jim Reber (jreber@icbasecurities.com) is president and CEO of ICBA Securities, ICBA’s institutional, fixed-income broker-dealer for community banks. Community Banker 21
COMPLIANCE Q & A TILA. Q: We have a loan that is a consumer installment loan. The loan officer took a vehicle as collateral and then, as additional collateral, they took a third lien on a real estate property that is not the customer’s primary dwelling. We know the loan officer must obtain a flood hazard check and an evaluation of the property. Since this is being uploaded as a consumer installment and not as a mortgage loan, would the loan officer have to produce Loan Estimates (LE) and Closing Disclosures (CD) for the customer because the loan has a real estate property as collateral, even though taken as an abundance of caution? A: Abundance of caution does not change anything here. Once you take real estate as collateral for a consumer-purpose loan, regardless of the reason, you have a TRID loan with a car as additional collateral. How you classify it in-house is up to you and does not affect TRID coverage. HMDA. Q: I am torn on this one. We have a manufactured home that’s titled but built in 2020. It appears that we did this credit as an “auto loan” (because of the title, I believe). But reading online, it looks like if a manufactured home is titled and built after 1976, it would be HMDA reportable, is that correct? A: Yes. Regulation C [12 CFR 1003.2(f)] defines “dwelling” as “a residential structure, whether or not attached to real property. The term includes but is not limited to a detached home, an individual condominium or cooperative unit, a manufactured home or other factory-built home …” ECOA. Q: We received an application, and my brain is circling on what would be the proper denial reason. Their current debt-to-income (DTI) ratio is 63%. They’ve applied to us for a refinance/consolidation that would bring their DTI down to 51%. Both exceed our DTI standards. However, would we use “excessive obligations in relation to income” or “insufficient income for the amount requested” as our reason for denial? I’m leaning towards “insufficient income for the amount requested” because they’re applying for a consolidation. However, the lender believes it should be “excessive obligations in relation to income.” A: The lender is correct. “Excessive obligations” means they are already over the maximum DTI. “Insufficient BILL SHOWALTER Senior Consultant, Young & Associates Inc. income” means the new loan will put them over the maximum DTI. TISA. Q: I have a “round-up savings” question. Is it a compliance requirement that all parties on a joint checking account authorize the automatic transfers (round-ups) to the linked savings account? When enrolling accounts in such a program, should the bank require all joint owners to agree to the terms? A: Regulation DD does not include or address a requirement that all parties on a joint checking account authorize the automatic transfers (round-ups) to the linked savings account. This would be a matter for the “account terms & conditions” (the contract), which is a legal document. You need to consult with the bank’s legal counsel. BSA. Q: I am in the midst of reviewing 2025 transaction activity for our Phase II CTR exempt customers. One such customer had four daily deposits to the business checking account in excess of $10,000. (I know five is required during the review period for continued exemption.) There were three other days throughout the year where the deposit was greater than $9,000 but less than $10,000. However, the deposit combined with a same-day currency exchange pushed the daily total currency figure above the $10,000 mark. The currency exchanges were handled outside of the deposit account. I know currency exchange transactions greater than 22 Community Banker
$10,000 that are handled outside of an exempt account are considered reportable transactions. My question is whether these days, where total cash activity exceeds $10,000 by combining deposits and exchanges, count towards continued exemption. If not, I have only four qualifying days and will have to revoke the exemption. A: Currency exchanges are added to a day’s deposits (and withdrawals). However, the issue here is the fact that the currency exchange is outside of an exempt account. From FinCEN’s “Guidance on Determining Eligibility for Exemption from Currency Transaction Reporting Requirements” in section H. Exemptible transaction accounts: “Question: The definition of a Phase II ‘exempt person’ in 31 C.F.R. § 1020.315(b)(6) and (7) includes the phrase ‘only with respect to transactions conducted through its exemptible accounts.’ Does this mean that certain transactions of Phase II exempt customers require the filing of a CTR? Answer: Yes. The scope of the exemption for non-listed businesses and payroll customers is limited by several criteria. While the final rules reduced those criteria with respect to the number of transactions and the waiting period before a bank could treat those customers as exempt, they did not alter the remaining criteria for Phase II customers, including the provision that a Phase II customer is exempt ‘to the extent of its domestic operations and only with respect to transactions conducted through its exemptible accounts.’ For transactions conducted by the customer outside of the criteria for Phase II customers, the customers would not meet the definition of ‘exempt person’ and could not be treated as exempt by the bank.” That last sentence clearly applies to your situation. The days when the currency exchanges caused the daily total currency transactions to exceed $10,000 are not counted in the number of days for qualifying as an “exempt person.” Insider Credit. Q: Our chairman of the board wants to purchase a second/vacation home. He needs to borrow $1,000,000. Reading Regulation O, it states that a member bank is authorized to extend credit in any amount to finance or refinance the purchase, construction, maintenance or improvement of a residence of the executive officer (EO), provided the extension of credit is secured by a first lien on the residence and the residence is owned by the EO. Financing will be a first mortgage purchase transaction on a residence of the executive officer. He also owns his primary residence, but it is free and clear. My uncertainty is whether “a residence” includes a second/ vacation home or only the primary residence. It is also our understanding that he will not use the second/vacation as a rental; it will strictly be used for his family. A: Good news for your chairman. Since his primary residence is free and clear, the unlimited amount exception for a residence may be used for this second/vacation home. An executive officer may have multiple residences at any one time, and the unlimited amount exception does not apply just to their primary residence. However, they may have only one loan at any one time that is taking advantage of this exception. If your chairman had had an existing loan on his primary residence, it likely would have made this second/ vacation home ineligible (depending on the amount of the existing loan). Flood Insurance. Q: We have a question about flood rules. We are a Federal Reserve regulated bank, and we notify a borrower 10 days prior to closing when a property is in a flood zone. The question I was asked is if the borrower gets the flood insurance in place, can we close the loan before the 10 days expires? A: Yes, as long as the bank has received acceptable evidence of adequate flood insurance coverage. A declarations page will suffice; a binder will not. SAFE Act. Q: Is it a requirement of the regulation that a listing of all employees who have an NMLS number be listed on the bank’s website? If not a requirement, would it be a “best practice”? A: No, there is no requirement to post such a list on the bank’s website. A notice must be posted in the bank, but anything beyond that is pretty much up to the bank. As the regulators stated in the final rule release, lenders are free to go beyond the minimal requirements in the SAFE Act rule. Young & Associates provides banks and thrifts with support for their compliance programs, independent reviews and in‑bank training, as well as a full menu of management consulting, loan review, IT consulting and policy systems. Community Banker 23
fraud and scams thrive not through any single vulnerability but through intricate webs connecting criminals, technology platforms, financial institutions and, unfortunately, victims. Addressing check fraud, for example, demands coordination among mail and shipping services, underground marketplaces, financial institutions, law enforcement agencies and regulatory bodies at every level of government. Community banks, ICBA and our affiliated state associations have emerged as crucial advocates in this fight. We’ve driven meaningful legal and regulatory reforms, championed law enforcement engagement, advocated for appropriately scaled technology solutions and developed targeted education programs for bank staff and customers. Progress has required sustained effort across multiple fronts, building knowledge of criminal enterprises and approaches to prevention, detection and mitigation, as well as coordinating stakeholder efforts and developing effective messaging. Headline-grabbing victories include momentum toward changes in the Uniform Commercial Code, the federal transition from paper Treasury checks to electronic payments and a multi-agency request for information on payments fraud from the OCC, Federal Reserve and FDIC. But equally important have been the quieter wins: stronger working relationships with policymakers, fraud prevention technologies for institutions of all sizes, educational resources and improvements in interbank fraud recovery. As we examine where regulatory efforts have succeeded and where gaps remain, community banks should take stock of their own preparedness. Reassess key elements of your strategy around fraud and scams, such as your technology stack. Newer fraud detection tools powered by AI have become more accessible and affordable, offering advanced capabilities with bottom-line results. Also, consider your relationships with stakeholders. First, assess your customer education efforts to make sure you’re communicating proactively about emerging scams and ways customers can protect themselves. Second, strengthen relationships with local law enforcement and post inspectors, perhaps by designating a fraud liaison who maintains regular contact with these agencies. Finally, continue to engage with ICBA, your state banking association and other industry groups. Regulatory momentum continued through the new year, and community banks benefit when they contribute perspectives to these discussions. Whether it’s commenting on proposed rules or sharing real-world fraud experiences, your voice matters in shaping practical, effective regulations. One principle guides our path. Fraud prevention demands unified action with shared responsibility across the entire financial ecosystem. Community banks that take proactive steps today will be better positioned to protect their customers and institutions tomorrow. Scott Anchin (scott.anchin@icba.org) is vice president of senior operational risk and payments policy at ICBA. We’re Making Progress in the Fight Against Fraud By SCOTT ANCHIN, Vice President of Senior Operational Risk and Payments Policy, ICBA 24 Community Banker
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