Community Banking Newsletter - Feb. 2026
- BCC
- Feb 3
- 1 min read
Date: February 03, 2026
Edition: February 2026
From: BCC - Your Trusted Partner in Community Banking Solutions
Website: www.bcc-usa.com
Welcome to the BCC Community Banking Newsletter, delivering forward-looking insights on key developments for community banks. This edition highlights updates in federal interest rates, community bank M&A, and BOLI, with practical strategies to navigate these shifts.
1. Federal Reserve Maintains Rates Amid Balanced Economic Outlook
The FOMC held the federal funds rate target range steady at 3.5% to 3.75% following its January 27-28 meeting, citing solid economic expansion and a stabilizing labor market, though inflation remains somewhat elevated (federalreserve.gov). Two members dissented in favor of a quarter-point cut, while Chair Powell emphasized data-driven decisions amid external pressures (federalreserve.gov). St. Louis Fed President Musalem noted the current rate as neutral, suggesting no further reductions unless conditions worsen (reuters.com).
Key Takeaway: Community banks should assess credit conditions and adjust lending strategies to leverage stable rates, potentially boosting deposit growth in a neutral policy environment.
2. Bank M&A Momentum Continues with Multiple Deals Announced
In January 2026, several bank acquisitions were announced across six states, including OceanFirst Financial’s agreement to acquire Flushing Financial, signaling sustained consolidation (bankingjournal.aba.com). Industry outlook predicts accelerated activity, with regional and community banks as prime targets, driven by favorable pricing and policy environments (americanbanker.com). Credit unions also advanced deals, prompting calls for tax exemption reforms following a controversial California acquisition (icba.org).
Key Takeaway: Community banks can evaluate acquisition opportunities to enhance scale and compete with nonbanks, ensuring thorough regulatory compliance for smoother approvals.
3. ICBA Designates BCC as Preferred Provider for BOLI and Executive Benefits
The Independent Community Bankers of America named BCC as a preferred provider for bank-owned life insurance and executive benefits plans, aiming to offer tailored solutions that support community bank compensation strategies amid competitive talent markets
(ICBA.org). This development underscores BOLI’s ongoing role in funding benefits without major regulatory changes in January.
Key Takeaway: Community banks should review BOLI options to strengthen executive retention and offset costs, aligning with robust risk management practices.
Stay ahead with BCC’s expert resources. Visit www.bcc-usa.com for personalized support.