Introducing 2026‑2027 NMBA President Aaron Emmert Page 4 The Meaning of Affordability in Today’s Economy By Mark Anderson Page 10 2027 Legislative Preview By John W. Anderson Page 6 PUB 23 | ISSUE 3 PUBLISHED BY NEW MEXICO BANKERS ASSOCIATION, FOUNDED IN 1906
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OVER A CENTURY: BUILDING BETTER BANKS — HELPING NEW MEXICO REALIZE DREAMS Our Mission The mission of the New Mexico Bankers Association (NMBA) is to serve member bank needs by acting as New Mexico banking’s representative to government, the public and the industry; providing resources, education and information to enhance the opportunities for success in banking; promoting unity within the industry on common issues; and seeking to improve the regulatory climate to the end that banks can profitably compete in the providing of financial and related products and services. ©2026 New Mexico Bankers Association (NMBA) | MBR Connect™. All rights reserved. New Mexico Bankers Digest 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 NMBA, 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. New Mexico Bankers Digest is a collective work, and as such, some articles are submitted by authors who are independent of NMBA. 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 (801) 676-9722. 4 Introducing 2026-2027 NMBA President Aaron Emmert Executive Vice President & CFO, Pioneer Bank 6 EXECUTIVE VICE PRESIDENT’S MESSAGE 2027 Legislative Preview By John W. Anderson, Executive Vice President, New Mexico Bankers Association 8 WASHINGTON UPDATE It’s Time To Talk Tokenization By Rob Nichols, President and CEO, American Bankers Association 10 The Meaning of Affordability in Today’s Economy By Mark Anderson, Legal and Legislative Assistant, New Mexico Bankers Association 12 The Housing Act’s New Reciprocal Deposit Legislation What It Means for U.S. Banks By Joe Hooker, Chief Sales Officer, IntraFi 14 A New Advantage for Homebuyers Housing New Mexico’s Pilot Program Offers Permanent 1% Interest Rate Buydown By Kristie Garcia, Director of Communications and Marketing, Housing New Mexico 16 Decoding the New SBA SOP By B:Side 20 Preparing the Balance Sheet for Digital Money By Michael A. Johnson, SVP & Southwest Regional Manager, PCBB 22 John Anderson, NMBA EVP, Named to 2027 Edition of Best Lawyers in America 22 Bank News CONTENTS 2026-2027 NMBA Board of Directors President Aaron Emmert Pioneer Bank 3000 N. Main St. Roswell, NM 88201 President-Elect Liz Earls Capra Bank 400 Tijeras Ave. NW Albuquerque, NM 87102 Secretary-Treasurer Scott Czarniak First National 1870 7300 Jefferson St. NE Albuquerque, NM 87109 Immediate Past President Max Myers Century Bank 100 S. Federal Pl. Santa Fe, NM 87501 Executive Vice President John Anderson NM Bankers Association 7801 Academy Rd. NE, Bldg. 2, Ste. 202 Albuquerque, NM 87109 TERMS EXPIRING 2027 Nicole Noto Wells Fargo Bank N.A. 200 Lomas Blvd. NW, 12th Fl. Albuquerque, NM 87102 Jay Jenkins CNB Bank PO Box 1359 Carlsbad, NM 88220 Jason Wyatt Western Commerce Bank 212 N. Canal St. Carlsbad, NM 88220 TERMS EXPIRING 2028 Paul Mondragon Bank of America 2125 Louisiana Blvd., Ste. 120 Albuquerque, NM 87110 Mark Horn Pinnacle Bank PO Box 1729 Gallup, NM 87305 Ken Clayton Western Bank 320 W. Texas St. Artesia, NM 88210 TERMS EXPIRING 2029 Richard Rowley Bank of Clovis 300 Main St. Clovis, NM 88101 Sheila Mathews Four Corners Community Bank 500 W. Main St., Ste. 101 Farmington, NM 87401 J. Chesley Steel Southwest Capital Bank 1410 Central Ave. SW Albuquerque, NM 87104 3
INTRODUCING 2026-2027 NMBA PRESIDENT AARON EMMERT How did you start in banking? I almost didn’t. When I graduated from Texas A&M, I went back home to El Paso and worked as a teller at Sunwest Bank for the summer. Then I turned down a job at First National Bank in El Paso, got married and moved to Indiana. After two brutal winters and a less-than-satisfying job at a consumer finance company, I called First National Bank and asked if they still had that job. They did. We moved back to El Paso, and I went to work for them in 1995. That started my 31 years and counting as a community banker. Any advice for young bankers? I was very lucky at First National Bank to have the opportunity to learn all aspects of banking. I started on the operations side, and after five years, they moved me to lending. Having the experience of both sides of the bank was a tremendous asset. My advice would be to learn as many jobs in banking as you can and don’t turn down any opportunities to learn something new that comes your way. Who was the greatest influence on your career? In my early years, Phil Lane and Doug McLean at First National were a tremendous influence. These guys ran a very efficient, profitable small community bank. They gave me more responsibility than I probably deserved as a young banker and let me figure it out. I spent a lot of time watching them and learning how to run a bank. How did you end up at Pioneer Bank? I went to work for Pioneer in 2017. I had previously been their market president in El Paso from 2006 to 2009. Christopher Palmer was the new president. He was looking for a CFO, and I was looking for a new challenge. When I took the job, one of the expectations was to get my CPA license. I had been a commercial lender for 17 years; it had been a while since I had prepared the call report and wore an accounting hat. I basically stopped all outside activities for two years and worked on getting my CPA license. It was the hardest thing I’ve ever done and the most rewarding. I mean, who becomes a CPA at 48? Executive Vice President & CFO, Pioneer Bank 4
What challenges do you foresee for bankers in New Mexico? Until the government leadership in New Mexico embraces business opportunity and the oil and gas industry in this state, we are going to continue to struggle with creating jobs and growing the economy. Bankers in growth states like Texas and Utah have it much easier than bankers in New Mexico. Despite that, bankers in New Mexico are doing their best to help business owners grow and prosper. Another issue that all bankers are dealing with is fraud, both at the bank level and the customer level. I have never seen as much fraud in my entire career as I have in the last few years. Every day, the bad guys call our customers and scam them out of their money. We do our best to stop it from happening. Cybersecurity threats continue to increase. I don’t have the answers, but it scares the heck out of me where this is all heading. Protecting the bank and your customers takes a team of experts, with new threats every day. Don’t get me started on credit unions. It’s not fair, and there doesn’t seem to be anything we can do about it. It’s very frustrating. I’m ready to go to war with them if anyone has any ideas. What’s on your agenda for the next year as president of the NMBA? Don’t be surprised when the NMBA joins forces with neighboring state banking associations in providing joint conferences and seminars. We can all work together to see and hear great speakers and provide excellent learning opportunities for bankers in New Mexico. We might learn something new from our neighbors. Tell us about your family and interests outside of work. I have been married to my wife, Shana, for 33 years, and we have two adult sons (they both tower over me). Shana runs a nonprofit, low-cost spay-neuter clinic in Roswell. It is her passion (and mine as well) to help control the pet population in our community. I have been on the board of directors at the Boys & Girls Club of Chaves and Lincoln Counties since I moved to Roswell in 2017. For the past five years, I have served as the board president. The Club does amazing work and has a positive influence on many children in the communities they serve. If I am not at the bank or at home, I am at the golf course. It’s pretty easy to find me. 5
EXECUTIVE VICE PRESIDENT’S MESSAGE 2027 LEGISLATIVE PREVIEW JOHN W. ANDERSON Executive Vice President New Mexico Bankers Association The first session of the 58th New Mexico Legislature begins its 60-day schedule on Tuesday, January 19, 2027. For those involved in lobbying efforts, the start date feels like it’s right around the corner. A few notable areas we’re monitoring closely include: 2027 Budget Thanks to the hefty revenues and investment income the state is receiving from the oil and gas industry, the 2027 Legislature will have significant funds to appropriate. In its August 2026 general fund consensus revenue estimate, the Legislative Finance Committee reported: • Total new money in FY 2028 is estimated to be $924.2 million, or 6.7% growth from the previous year’s spending. • New money and recurring revenues revised higher due to sharp turns in revenue activity early in 2026. • Investment income and oil and gas revenues hide the weaker underlying economic revenue growth. • Labor markets are struggling and affordability challenges are rising. • Revenues boosted by high oil prices, which are exhibiting high volatility with external events (war in Iran, tariffs, etc.). 6
• Gross receipts tax is boosted by inflation and construction. Geographic concentration risks and disproportionate gains remain a concern. • Personal income taxes are moving sideways; employment weakness is translating into slow growth. • Corporate income taxes have fallen, but pass-through entity payments are ballooning. • Higher oil prices are translating into higher revenues. A $1 change in the annual average price of oil in New Mexico has a $56.45 million impact on total state revenue. • Investment earnings remain the bright spot, providing the fast-growing and most stable revenues to the budget. • Revenues falling below their trend, except for investments that are lifting revenues. • Recession probabilities are down from recent levels. • Oil prices are holding up for now, but lower prices could arrive quickly. • Steep earmarks are causing cliff effects that cut revenue growth nearly in half. • Total revenues are sufficient for a short-term downturn. • Total reserves are overinflated with funds used for other purposes. • Inflation remains a key source of uncertainty in the revenue forecast. Higher inflation can suppress real economic activity, reducing incomes and spending and creating downside risks for state revenues. At the same time, inflation can temporarily boost nominal tax collections, presenting an upside in the near-term. 2027 Legislation We anticipate that the following legislation will be introduced during the 2027 legislative session. Interchange Fees In 2025, Illinois became the first state to enact the Interchange Fee Prohibition Act, a law that exempts merchants from paying interchange fees on sales tax and tips included in credit and debit card transactions. The act is scheduled to go into effect on July 1, 2027. In 2026, the Colorado Legislature passed a bill prohibiting the collection of interchange fees for sales taxes. Specifically, the legislation would prohibit the payment card networks and financial institutions with more than $60 billion in assets from charging interchange fees on sales taxes. It was also amended to mandate that retailers with at least 500 employees use the savings to reduce prices or boost their employee wages and benefits. The bill was vetoed by the Colorado Governor. In 2025, HB 476 was not introduced in the New Mexico House of Representatives. The bill would have prohibited interchange fees on taxes and gratuities. The bill was not enacted. We anticipate a similar bill will be introduced in 2027. State Bank For no fewer than 10 sessions, a Public Bank Acts has been introduced in the Legislature but not adopted. Without discussing the details contained in prior public bank acts, the NMBA has noted the following points in its opposition to the public bank: • What market failures or gaps exist that would require the formation of a public bank? • The implications of creating a public bank pose risks to New Mexico’s taxpayers and would saddle the state with high, unwarranted costs to replicate a highly competitive, regulated and federally insured banking system that exists in communities across New Mexico. • Starting a public bank would needlessly consume public funds that could be used for health and safety, infrastructure and community development when financial services are already provided by taxpaying private-sector banks operating in a highly competitive marketplace. We anticipate a Public Bank Act will be introduced in 2027. AI Regulation In 2025, Rep. Christine Chandler (D-Los Alamos) introduced HB 60, the Artificial Intelligence Act, a regulatory framework for AI systems. The Act primarily focused on protecting consumers from algorithmic discrimination by establishing developer responsibilities, deployer risk-management requirements, legal-enforcement parameters and protective provisions. Developers were to publicly list all high-risk AI systems they offer and explain their risk mitigation measures. Deployers of an AI system were required to use reasonable care to protect consumers from any known or foreseeable risk of algorithmic discrimination. We anticipate a bill similar to HB 60 will be introduced in 2027. Conservator Liability Under current law, a conservator of an estate cannot be released from liability for legal actions arising from the conservatorship. We anticipate a bill will be introduced in 2027 to provide a limitation on liability for conservators similar to a bill introduced in 2025 (HB 125). Other Issues Likely to be Considered Other issues that are likely to be addressed by the 2027 Legislature include: • Tort reform • Paid family and medical leave • Affordable housing • Medicaid • SNAP • Medical compacts 7
WASHINGTON UPDATE IT’S TIME TO TALK TOKENIZATION ROB NICHOLS President and CEO American Bankers Association For much of 2026, the conversation around digital assets has been dominated by stablecoins, as regulators worked to implement the Genius Act — the 2025 law governing stablecoins — and lawmakers debated the Clarity Act, a more comprehensive regulatory framework for all digital assets. To be clear, ABA supports establishing clear rules of the road for digital assets, but the version of the Clarity Act under consideration when the Senate recessed in August needs to be strengthened. With help from bankers, our state association partners and other business groups, we’re engaged in an all-out push to protect local lending and the economic growth it fuels by ensuring crypto companies aren’t allowed to incentivize deposit flight from banks by offering yield-like rewards on payment stablecoins. While we continue our work to improve the Clarity Act and make sure crypto firms looking to compete with banks face the same rigorous rules as banks, it’s also time to move the opportunities that digital assets present for our sector to the center of the conversation, including opportunities around tokenized money. Simply put, “tokenization” is the process of representing ownership of an asset on a blockchain, and “tokenized money” refers to programmable digital tokens — like stablecoins, tokenized deposits and central bank digital currencies — that represent ownership of money on a blockchain. The first thing to understand about tokenization is that it’s happening right now. Capital markets are already shifting bonds, funds and collateral onto shared ledgers, so it follows that tokenized securities will need tokenized money to work efficiently. Whether in capital markets or treasury management and 8
payments scenarios, customers are looking to take advantage of blockchain’s ability to support always-on tech, instant settlement and programmability. Bankers need to get up to speed on what’s happening — or risk getting left behind. Most bankers I speak to understand that tokenized money is important, but they aren’t sure what to do about it. That’s understandable, given the pain points currently standing in the way. Many banks find that they don’t have the scale to act alone; there are unsolved issues related to convertibility, fungibility and liquidity; “know your customer” and anti-money laundering challenges; and so on. But there are also potential advantages to things like tokenized deposits: They provide stable value, they improve capital efficiency, they can offer regulatory certainty, they are recorded as “deposits” on the liability side of the balance sheet, and they enable credit intermediation. Across the industry, work is underway to determine how tokenized money could support faster settlement, better liquidity management and new treasury services for customers. You’ve probably seen recent announcements about banks, consortiums and others launching initiatives in this space. These are important developments, but the point is not that every bank needs to build its own solution. Rather, banks of all sizes need a path to participate safely and at scale, and ABA, as well as state bankers associations and other industry partners, are focused on helping chart that path. ABA’s Office of Innovation has been on the leading edge of the effort to better understand how tokenization can benefit the banking industry from a strategic perspective. You’ll be hearing much more from us in the coming days on our work to help ABA members chart a path forward, including at the 2026 ABA Annual Convention, October 25-27 in Salt Lake City. I encourage you to join us in Salt Lake to stay a step ahead. America’s banks have always been pioneers when it comes to payments innovation — and we aren’t stopping now. Email Rob at nichols@aba.com. The Advisors’ Trust Company® Zia Trust, Inc. Independent Corporate trustee 6301 Indian School Rd NE Suite 800 Albuquerque, NM 87110 Albuquerque • SAntA Fe • lAS CruCeS • Phoenix • tuCSon 9
THE MEANING OF AFFORDABILITY IN TODAY’S ECONOMY By Mark Anderson, Legal and Legislative Assistant, New Mexico Bankers Association When viewing the current political and economic climate in America, one of the most frequently deployed techniques by bad-faith actors is the manipulation of language, specifically using words outside their actual meaning and context, rendering them effectively meaningless or changing their meaning altogether. For example, a scandal-ridden federal politician can excuse his or her financial corruption under the guise of maintaining “national security,” even if the matter has nothing to do with the actual national security of America. “National security” has essentially become a catch-all term, something a politician can claim as a purpose while engaging in, say, insider stock trading and, in today’s media climate, reasonably expect minimal pushback. National security, like terms such as “seeking accountability” or “economic development,” often serves as a thought-terminating cliché that can mean everything and nothing at the same time, but it can accomplish the goal of stopping invasive lines of questioning from journalists or constituents. Certainly, economic development is a real, tangible concept that improves lives, but it can be invoked in a vague, opaque way for public-relations purposes, often to shield unpopular, harmful policies. Another word that has recently entered this zone of vague public-relations speak is “affordability.” Everyone understands that affordability, in its simplest terms, refers to prices the average person or family can pay for goods or services without incurring financial hardship or instability. For example, to your average American, who likely doesn’t have a great deal of savings, a dinner exceeding $100 on a regular basis is unaffordable. However, when today’s political and media classes discuss affordability, it can seem as if they are speaking a different language or referencing a separate reality, because for the average American family, very little is affordable anymore. But many media pundits and members of Congress appear reluctant to grapple with the reality that many Americans have been priced out of entire sectors of the economy, making affordability a moot point. The concept of affordability in the world of Congress and elite media punditry aligns with the budgets of individuals with net worths exceeding $10 million. The reality they fail to recognize is that, according to virtually every data set, more than 60% of Americans live paycheck to paycheck. These are people who, far from deliberating on notions of affordability, are preoccupied with survival. A recent article in Fortune highlights how difficult the current economy is to navigate for American families without high net worths. The article reports that, according to a new Pew Research Center analysis based on survey data from earlier in 2026, 60% of U.S. adults now identify as “working class.” Looking more closely at the data, this includes millions of top earners who believe their economic plight is largely synonymous with a term long reserved for low-income workers, including over half of college graduates. As the article further explains, “Working class has long been an ambiguous label for low-income earners, people without four-year degrees, and blue-collar workers. But according to survey data, half of upper-income adults (those earning more than $155,600 annually) now see themselves as working class. That income would have placed them firmly in the upper middle class in the early 2000s.” 10
Human beings respond to language when it feels comforting or positive, but we must vigilantly look beyond what is spoken or written. We must think critically about why certain words are used, and what benefit they provide to those who deploy them. Much like the word “affordability,” the term “working class” loses meaning when the reality underneath it shifts. As many goods and services become unaffordable for the majority of Americans, so too shifts the perception of the “working class.” Use of language and changes in meaning and context reflect material reality, and the terms we use to express economic reality are shifting right in front of our eyes. As the Fortune article further details, “Even wealthier and more educated people have begun to feel the squeeze as inflation continues to erode Americans’ paychecks while wage growth fails to keep up. Ordinary purchases like groceries have become harder to afford, putting the American Dream more out of reach than ever. A study by Investopedia found that achieving the American Dream — a house in the suburbs, two children, and a car — costs $4.4 million, more than $1 million more than most Americans will earn in their lifetimes. The median price of a new single-family home in the first quarter of 2026 was $403,200, according to the National Association of Home Builders. This marks the fourth consecutive quarter in which existing home prices have exceeded new home prices. The typical U.S. homebuyer is now 59 years old, up from 39 just 15 years ago, and the median first-time buyer has climbed to a record 40.” The barriers that have been set up to prevent economic mobility are now affecting every facet of society. One particularly notable aspect of this is the complete disillusionment of younger generations. Gen Z, the most recent generation to enter adulthood, is burdened by record-high debt, AI-related threats and a historically difficult entry-level job market. In recent polling, only 21% of young people today think the American Dream is achievable for them, down from over 50% just a decade ago. That is a stunning drop in a relatively short amount of time, and it’s easy to see why it’s occurred. The most recent official data from the New York Fed shows that recent graduates were unemployed at a rate of 5.7% in June, and serious economic analysts know that unemployment figures tend to wildly undershoot the actual figures. Many recent college graduates have reported a truly dire job market, filled with fake online job postings, non-existent responses and a sense of complete futility when searching for even entry-level jobs. Also, young people are facing the ever-present threat of artificial intelligence wiping out jobs across a multitude of industries. It’s a recipe for utter cynicism destined to evolve into nihilism among younger generations. Going back to “affordability,” there’s a reason that it has become a favored buzzword among our political and media classes. It’s an indistinct catch-all that signals a politician is ostensibly empathetic to his or her constituents’ economic plight, but that doesn’t commit him or her to concrete policies. Occasionally, a politician will elaborate upon the concept with actual plans to lower costs for everyday people, but that is the exception to the rule. More often, it’s used as a signal to convey broadly populist sympathies, free of any substantive course of action. The transformation of affordability into a vague, PR-friendly buzzword has made the concept essentially meaningless in our modern economy. Bolstering this is a Harris Poll from early 2026, which found that 64% of six-figure earners said their once-high income is no longer a marker of success, but rather a minimum to stay afloat. Even many six-figure households say buying a home feels unattainable. For high-income earners in the six-figure range, it would be reasonably appropriate to describe the modern American economy as unaffordable. However, for many working-class Americans, it would be more accurate to describe it as a constant balancing act on the razor’s edge of homelessness. That’s a far different state than a mere affordability crunch. As the economy becomes more difficult to navigate for most Americans, the effort to render language both all-meaning and meaningless will continue unabated. As we have seen in recent years, the use of language to both soften and sell unacceptable choices is an enormous asset for malicious actors in power. Human beings respond to language when it feels comforting or positive, but we must vigilantly look beyond what is spoken or written. We must think critically about why certain words are used, and what benefit they provide to those who deploy them. In our modern world, language is a tool that buys time to sell unpalatable policies, and words are a shield that defend the indefensible. Rendering language meaningless, or even changing its meaning altogether, is a powerful defense against a dissatisfied population. We, as Americans, must think hyper-critically about the language we encounter, and whether it is being used to sell or soften what may become a critical problem in the future. 11
THE HOUSING ACT’S NEW RECIPROCAL DEPOSIT LEGISLATION What It Means for U.S. Banks By Joe Hooker, Chief Sales Officer, IntraFi 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. 12
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. Use IntraFi’s new reciprocal deposit calculator tool to determine your bank’s new numbers by scanning the QR code. https://hub.intrafi.com/reciprocal-legislation-2026 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. 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. As the inventor and largest provider of reciprocal deposits, and with the highest per-depositor and per-bank capacity, IntraFi stands ready to help banks of all sizes use reciprocal deposits to strengthen their balance sheet and grow local, loyal customer relationships. 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. The move to a tiered system reflects a broader regulatory shift toward aligning deposit rules with the realities of modern banking. 13
A NEW ADVANTAGE FOR HOMEBUYERS Housing New Mexico’s Pilot Program Offers Permanent 1% Interest Rate Buydown By Kristie Garcia, Director of Communications and Marketing, Housing New Mexico Homebuyers in New Mexico have another option for assistance with purchasing a home. Housing New Mexico has launched a pilot program — NewHome Rate Advantage — offering a permanent 1% interest rate buydown on a fixed-rate 30-year first mortgage. The program is available to qualified homebuyers purchasing a newly constructed home through Housing New Mexico’s HomeForward program. Borrowers must apply through approved Housing New Mexico participating lenders. NewHome Rate Advantage is being funded with the New Mexico Housing Trust Fund. “Thanks to legislators and Gov. Michelle Lujan Grisham for the appropriations into the New Mexico Housing Trust Fund,” said Housing New Mexico Executive Director/CEO Isidoro Hernandez. “This pilot program will help many New Mexicans purchase a home. This is an innovative program to address the affordable housing challenges in our state, and we appreciate the collaboration with the New Mexico Home Builders Association to bring this program to fruition.” The monthly payment savings will depend on the loan amount. For example, it is estimated that the interest rate buydown on a $300,000 loan could result in a monthly savings of $188 for the homeowner. The home being purchased may be site-built, detached or attached, and the certificate of occupancy must not have been issued more than 12 months prior to the date of purchase. Homes may be located anywhere in New Mexico, including on Federally Designated Tribal Land. “New Mexico Home Builders Association is proud to partner with Housing New Mexico/MFA to launch the NewHome Rate Advantage Program,” said New Mexico Home Builders Association CEO Miles D. Conway. “When every $1,000 reduction in a home’s price allows more than 1,000 additional New Mexico families to qualify for a mortgage, this permanent rate buydown opens the door to the American dream of homeownership for thousands of hardworking families. By expanding the pool of qualified homebuyers, this program will rapidly and effectively enable our state’s family-owned builders to construct the attainably priced homes New Mexico urgently needs. It represents a vital step toward a future where more New Mexicans can afford a place to call home.” 14
This program is only for borrowers who will occupy the home as their primary residence. It is not available to borrowers seeking to purchase an investment property, rental property or a second home. The NewHome Rate Advantage program is available to qualified homebuyers purchasing through Housing New Mexico’s HomeForward program. The home must meet HomeForward’s income and purchase price limits, which are available on the Housing New Mexico website and accessible by scanning the QR code. https://housingnm.org/individuals-and-families/homebuyers/ income-and-purchase-price-limits#homeforward Interested buyers should consult with Housing New Mexico participating lenders — scan the QR code to view the list. https://housingnm.org/individuals-and-families/homebuyers/ mfa-participating-lenders Housing New Mexico began accepting loan reservation requests for this program from participating lenders on behalf of their clients in late July. NewHome Rate Advantage is a pilot program with limited funding and is expected to help 350 to 400 households purchase newly constructed homes. To learn more about the NewHome Rate Advantage and all homebuyer programs, visit housingnm.org. Housing New Mexico has launched a pilot program offering a permanent 1% interest rate buydown on a fixed-rate, 30-year first mortgage for qualified homebuyers purchasing newly constructed homes through Housing New Mexico’s HomeForward program. (Photo courtesy of Abrazo Homes) 15
DECODING THE NEW SBA SOP By B:Side The SBA’s new SOP 50 10 8.1 took effect October 1, 2026, bringing a number of changes for SBA 504 and 7(a) lenders to incorporate into their underwriting and closing processes. Some updates are straightforward, while others affect financial analysis, change-of-ownership underwriting, documentation and eligibility. There are also changes that create new opportunities, particularly around energy projects and multiple SBA 504 financings. 16
SBA 504 Updates The biggest change for SBA 504 lending is on the underwriting side: The minimum debt service coverage ratio increased from 1.00:1 to 1.15:1. Prior SBA policy required business tax returns and current year interim financial statements. Now SBA is asking for the highest level of financials available as well. In addition, the SBA also provides more detailed guidance on global cash flow, including how to account for distributions, owner compensation, unfunded capital expenditures and fully drawn lines of credit. For SBA 504 loans with a total project cost of $5 million or more, CDCs will also need to obtain and incorporate the third-party lender’s underwriting analysis into the CDC credit memo. In other words, expect a little more rigor around the numbers and a closer look at the full credit picture. Specifics on the third-party lender loan went into effect as well. The maturity of the third-party loan cannot exceed the SBA 504 debenture term, and its amortization cannot exceed that of the SBA 504 loan. The new SOP clarifies that businesses are ineligible when the owner isn’t actively controlling operations, including assigned-space revenue models or leveled models, in which a small business relies on a middle-level operator and doesn’t own the necessary contracts to operate. There are some meaningful opportunities in the update, too. SBA has removed the $16.5 million aggregate cap on outstanding eligible energy projects, while the maximum debenture remains $5.5 million per qualifying energy project. The new SOP also incorporates previously issued guidance that allows borrowers to finance multiple SBA 504 projects simultaneously and confirms that the SBA 7(a) guaranty exposure no longer reduces the maximum SBA 504 debenture available. For construction projects, the allowable contingency increases from 10% to 15% of construction costs. What does this mean for lenders? More opportunities to bring SBA 504 loans into the conversation, particularly for borrowers with expansion, energy or multiple fixed-asset financing needs — but with a higher bar for underwriting and documentation. It’s worth getting familiar with the changes now so you can spot SBA 504 opportunities early, structure them correctly and bring B:Side into the conversation before the deal is too far down the road. SBA 7(a) Updates The SBA 7(a) program sees its own round of changes, starting with documentation. Credit reports and personal financial statements must now be dated within 90 days, rather than 120 days, and credit reports must be submitted to the SBA. Lenders will also need to use the three most recent year-end financial statements and the highest level of financial reporting available, along with the most current interim financial statement and the comparable interim financial statement from the previous year, for change-of-ownership transactions. If a trust owns any percentage of the borrower, both the trust and the trustor must guarantee the loan. Business acquisitions face a higher underwriting bar and are one of the biggest changes under the new SOP for SBA 7(a) financing. Lenders can no longer rely on projections to meet the DSC standard, and the SOP establishes specific requirements for initial acquisitions, business expansions and owner buyouts. The minimum DSC is 1.25:1 for initial acquisitions and owner buyouts, and 1.15:1 for business expansions. Initial acquisitions also require a minimum 10% equity injection of the total project. The SOP also adds requirements around partial ownership changes, seller guarantees and seller financing, including a 36-month seasoning requirement for seller-financed notes before they can be refinanced. Change-of-ownership transactions also require a third-party business valuation and a quality-of-earnings report for projects of $3 million or more. The seller’s exit period can extend to 24 months, up from 12 months, while buyer rebates must be applied to pay down the loan. Projects that include real estate can be structured as separate loans or blended on a weighted average. There are some other notable updates, including new restrictions on non-cash sources of equity, additional requirements for minority equity investments, and 17
new eligibility and documentation guidance for certain businesses. The SOP also introduces new SBA Express options, including a new term loan to refinance an original SBA Express loan and options for loans in their revolving period. There are also clarifications around prior losses, current delinquencies and SAFER web searches for certain NAICS codes. What does this mean for lenders? Change-of-ownership deals will require more upfront planning, particularly around financial analysis, equity, valuations and seller financing. Getting familiar with the new requirements now can help lenders identify potential issues earlier and set clearer expectations with buyers and sellers. Putting the Changes into Practice None of these changes needs to slow a deal down, as long as they’re on your radar early. Knowing the new requirements helps you spot opportunities, set the right expectations with borrowers and structure transactions correctly from the start. If a deal could work as either an SBA 504 or 7(a) loan, loop in B:Side early, and we’ll help you sort out which program and structure makes the most sense. Have questions? Scan the QR code to reach out to our client relations officer team. https://bside.org/contact-us/#CRO Getting familiar with the new requirements now can help lenders identify potential issues earlier and set clearer expectations with buyers and sellers. 18
Contact us today to place your announcement. Call (801) 676-9722 or scan the QR code to fill out the form. Let’s Celebrate Them! Great Work Begins With Great People … This magazine is a perfect place to recognize your employees for: » Awards » Promotions » Anniversaries » Achievements » Retirements Dandandit, et rem voluptatem eicabor audam quunden ditiaes tionserior repe ellaborumquo molupta temossi mperibus incil inis nobissimpe sanducit reptaerum. Inis nobissimpe sanducit reptaerum. Meet Diana Lucero. “With the right partners, building a home becomes one of life’s most rewarding experiences.” Diana Lucero, SVP | Construction Loan Specialist Trusted partnerships. Shared vision. Exceptional results. Your dream home starts with the right partner. Call Diana to get started today! Partnerships made inNew Mexico MyCenturyBank.com | 505.798.5910 All loan applications are subject to credit approval. Century Bank NMLS #556023 | Diana Lucero NMLS #539895 Builder: Zachary & Sons Homes 19
PREPARING THE BALANCE SHEET FOR DIGITAL MONEY By Michael A. Johnson, SVP & Southwest Regional Manager, PCBB Stablecoins, tokenized deposits, real-time payments and other digital-money models are moving the industry toward faster, more programmable and potentially 24/7 money movement. For community banks, the immediate issue is not whether every customer will adopt these tools tomorrow — it’s whether the bank’s liquidity framework, funding mix and contingency funding plan are ready if deposits become more mobile, rate-sensitive or concentrated. Liquidity risk is the risk that a bank cannot meet obligations as they come due without incurring unacceptable losses. In a faster-moving payments environment, that core risk doesn’t change, but the potential speed, timing and concentration of outflows may. The response shouldn’t be to abandon relationship banking or to hold excessive cash “just in case.” It should be to build a contingency liquidity plan to preserve options, such as protecting core funding, meeting accelerated outflows, and continuing to serve customers without forced asset sales or unnecessarily expensive funding. Digital Money Can Change Deposits Stablecoins and tokenized deposits have different structures, regulatory treatments and balance-sheet implications. Yet, both reinforce a broader trend: Moving money may become easier. Stablecoins can draw transaction balances into digital wallets or other nonbank payment channels. At the same time, stablecoin issuers may place large operating or reserve balances at banks. That means the effect may not be a simple, one-for-one decline in total deposits. Instead, funding could shift from diversified relationship balances toward larger, uninsured and potentially more volatile deposits. Tokenized deposits present a different consideration. They remain bank deposits, but they can be transferred and programmed using distributed-ledger infrastructure. If 20
adopted broadly, instant settlement and automated fund movement could shorten expected deposit lives and increase rate sensitivity. The practical result could be greater pressure on liquidity buffers, funding costs and the bank’s capacity for maturity transformation. Real-time payment services add another dimension. Faster payments do not necessarily create a liquidity problem, but they reduce the time available to identify, fund and respond to emerging pressure. A bank that once had hours, or even a full business day, to react may now need reliable intraday liquidity and clear decision-making processes. The key management question is not simply, “Will we lose deposits?” but “How would our liquidity, funding costs and lending capacity change if deposits moved faster or behaved less like core funding?” Build the Plan Before Stress A strong contingency funding plan should be practical, up to date, tested and integrated with the bank’s asset-liability management process. It should identify early-warning indicators, quantify credible stress scenarios, define available funding sources, and establish clear escalation and communications procedures. Here are four practices that can help: 1. Know the deposit base. Segment deposits by customer type, size, insurance status, relationship depth, operating purpose and demonstrated rate sensitivity. Management should understand which balances are likely to remain stable and which could move quickly in a stress event. 2. Maintain diversified funding. A contingency plan should identify multiple sources, such as Federal Home Loan Bank advances, Federal Reserve discount window capacity, correspondent bank lines, brokered deposits, deposit networks and loan participations or sales. The goal is not to use every source routinely, but to ensure several options are available when needed. 3. Keep collateral and documentation ready. Borrowing capacity is only useful if collateral records, legal agreements, and operating procedures are up to date. Banks should periodically verify available collateral, confirm borrowing limits and test the mechanics of accessing each facility. 4. Stress test speed, not just size. Traditional liquidity scenarios may focus on the total amount of projected outflows. In a faster-payments environment, management should also model how quickly deposits could leave, how intraday demands could develop and whether staff can execute the contingency plan under pressure. A Competitive Capability Digital assets and real-time payments may not reshape every community bank’s balance sheet at the same pace. Still, they could reduce the friction that has historically supported deposit stability and make liquidity events faster, more concentrated and more operationally demanding. Don’t wait for certainty to make liquidity readiness a competitive capability. Understand the deposit base in greater detail, maintain tested funding alternatives, calibrate pricing to funding quality and preserve sufficient, immediately available liquidity to serve customers through stress. A well-built contingency funding plan gives a bank more than an emergency playbook. It helps protect the franchise, defend lending capacity and support confident participation in an evolving payments landscape. For more information, visit pcbb.com. You can reach me via email at mjohnson@pcbb.com. Dedicated to serving the needs of community banks, PCBB’s comprehensive and robust set of solutions includes cash management services such as settlement and liquidity for the FedNow Service, international services, lending solutions and risk management advisory services. 21
JOHN ANDERSON, NMBA EVP, NAMED TO 2027 EDITION OF BEST LAWYERS IN AMERICA John Anderson, executive vice president of NMBA, has been recognized by his peers in the 2027 edition of The Best Lawyers in America for his high-caliber work in banking and finance law. Inclusion in Best Lawyers is based on a rigorous peer-review survey. For more than 40 years, Best Lawyers has been regarded by both the profession and the public as the most credible measure of legal integrity and distinction. As such, recognition by Best Lawyers symbolizes excellence in practice. Best Lawyers’ founding principle remains unchanged since 1981 and forms the basis of its transparent methodology: The best lawyers know who the best lawyers are. No fee or payment to participate is allowed. Consequently, as a Best Lawyers honoree, John possesses the elite privilege to participate in the exclusive voting process for next year’s edition. Capra Bank’s Michael Gallour Featured in The Business Journal’s “People on the Move in Albuquerque” Capra Bank, in a recent edition of The Business Journal in Albuquerque, highlighted Senior Vice President of Commercial Banking Michael Gaillour for his outstanding performance since Capra Bank opened in Albuquerque in July of 2024. Mike expertly leverages his decades of experience to build strong client relationships and support the financial growth of businesses across New Mexico. His dedication, expertise and extensive experience have played a vital role in driving Capra’s rapid growth. Mike is also deeply committed to community service, as he volunteers with United Way of Central New Mexico, serves on the Albuquerque Public Schools Community Capital Advisory Committee, and is trust protector for the Questa, New Mexico Economic Development Fund established by Chevron Corporation. He has volunteered with Big Brothers Big Sisters. Congratulations, Michael! 22
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