Community Banking Newsletter - May 2026

Date: May 5, 2026

Edition: May 2026

From: BCC - Your Trusted Partner in Community Banking Solutions

Website: www.bcc-usa.com

Welcome to the BCC Community Banking Newsletter, delivering targeted insights on

developments shaping community banks. This edition reviews advancements in BOLI, M&A, and federal rate policy with fresh perspectives to support your planning.

1.  FDIC Updates Guidance on Bank-Owned Life Insurance (BOLI)

The FDIC revised its longstanding interagency guidance on BOLI in March 2026, with ongoing applicability into April. The update refines risk management expectations, accounting treatment, and concentration limits for policies used in executive benefits and succession planning, emphasizing robust board oversight and documentation (fdic.gov).

Key Takeaway: Community banks should conduct a fresh review of BOLI portfolios against the revised guidance to ensure compliance, optimize tax advantages, and strengthen risk

management practices ahead of examinations.

2.  Community Bank M&A Activity Continues Strong Momentum

Community bank mergers accelerated in 2025 and carried positive momentum into early 2026, with 127 completed deals involving community banking organizations in 2025—the highest since 2021. April 2026 activity featured strategic acquisitions focused on geographic expansion, scale efficiencies, and enhanced capabilities while preserving local community focus (kansascityfed.org).

Key Takeaway: Community banks evaluating growth should prioritize disciplined M&A strategies that deliver operational synergies and market reach while maintaining their core community banking model.

3.  FOMC Holds Federal Funds Rate Steady at 3.50%-3.75%

On April 29, 2026, the Federal Open Market Committee maintained the target range for the federal funds rate at 3½ to 3¾ percent. Policymakers noted solid economic activity and

moderating but persistent inflation pressures, keeping options open for future adjustments based on incoming data (federalreserve.gov).

Key Takeaway: Community banks can proceed with measured balance sheet and loan pricing strategies, incorporating a stable near-term rate environment while closely tracking local economic indicators for credit demand and risk management.

Explore how BCC can support your BOLI programs, strategic planning, and regulatory compliance. Visit www.bcc-usa.com to schedule a consultation.