Community Banking Newsletter - Aug. 2025
- BCC
- Aug 11
- 2 min read
Date: August 11, 2025
Edition: August 2025
From: BCC - Your Trusted Partner in Community Banking Solutions
Website: www.bcc-usa.com
Welcome to the BCC Community Banking Newsletter, delivering essential insights on developments impacting community banks. This edition covers key updates from July 11 to August 11, 2025, in federal interest rates, community bank M&A, and BOLI.
1. Federal Reserve Keeps Rates Steady, Emphasizes Community Bank Resilience
Governor Michelle Bowman highlighted in a recent speech that the FOMC has maintained the federal funds rate target range at 4.25% to 4.5% throughout 2025 so far, amid balanced risks to employment and inflation goals. She discussed how this environment affects community banks, noting their strong capital positions but potential challenges from prolonged higher rates on liquidity and funding costs (federalreserve.gov).
Key Takeaway: Community banks can leverage this stability to bolster risk management and explore diversified funding sources for sustained growth.
2. U.S. Banking M&A Sees Active First Half with 72 Deals Announced
A mid-year review indicates 72 banking mergers and acquisitions announced in the first half of 2025, reflecting increased activity driven by strategic consolidations among community institutions to enhance scale and efficiency in a competitive landscape (angle.ankura.com). This surge builds on Q1's 34 deals worth $1.61 billion, with expectations for continued momentum into the second half (cbh.com).
Key Takeaway: Community banks are evaluating partnership opportunities to improve technological capabilities and market reach amid rising consolidation trends.
3. Ongoing Focus on BOLI as a Strategic Tool for Community Banks
The Independent Community Bankers of America (ICBA) continues to emphasize BOLI's role in supporting community banks through benefit funding and income generation, with recent briefings underscoring compliance and risk management best practices in volatile markets (icba.org). FDIC guidelines reinforce the need for robust oversight in BOLI holdings to ensure safety and soundness (fdic.gov).
Key Takeaway: Community banks can optimize BOLI portfolios by conducting regular reviews to align with regulatory updates and enhance non-interest income streams.
Stay proactive with BCC's specialized BOLI and consulting services. Visit www.bcc-usa.com for tailored support.