The State of Community Banking 2026

• 3,818 FDIC-designated community banks held $2.77 trillion in assets at June 30, 2026.
• 155 charters left the industry in calendar 2025: 108 mergers, 30 reorganizations, 15 voluntary closings, 4 new charters, and 2 failures.
• Community bank aggregate net income rose to $8.72 billion in Q2 2026 from $7.69 billion in Q2 2025. Return on assets moved from 1.04% to 1.21%; return on equity from 10.03% to 11.13%.
• Unrealized securities losses declined from $34.2 billion to $26.2 billion over the same twelve-month comparison.

Sources: CBI analysis of FDIC BankFind institution history and FDIC Call Report data; period ending June 30, 2026.

• Efficiency improves with size, from 74.9% for banks under $100 million to 55.5% for banks over $10 billion.
• Return on assets does not improve in a straight line: it is 1.32% for $300 million, $1 billion banks, 1.43% for $3, $10 billion banks, and 1.27% for banks over $10 billion.
• The median bank between $100 million and $1 billion runs a 63.5% efficiency ratio; the 90th percentile in that same band runs 85.7%, a 22-point difference.
• The report's within-tier comparison finds a larger distance between peers of the same size than between adjacent size bands.

Sources: CBI analysis of FDIC Call Report data, June 30, 2026; SRA Consulting analysis of FFIEC Call Report bulk data, Q1 2024, Q1 2026.

• 181 US bank deals were announced in 2025, the highest total since 2021. There were 84 announcements in the first half of 2026.
• The median price paid in the first half of 2026 was 141% of tangible book, while 68% of banks said they would require at least 175% to consider selling.
• Average time from announcement to close for deals over $500 million fell from 369 days in 2024 to 126 days in 2026 year to date.
• Access to low-cost deposits became the leading stated reason to acquire another bank, named by 41% of prospective buyers.

Sources: S&P Global Market Intelligence, Forvis Mazars, Bank Director, and CBI synthesis as cited in the report.

• Michigan had 72 active bank charters in September 2026, with $72 billion in total assets and no institution over $10 billion.
• Twenty-six Michigan banks sat between $500 million and $3 billion in assets; five were already committed to a transaction when the report reviewed their status.
• Michigan's first-half 2026 return on assets was 1.48% versus 1.29% for all US banks on the same basis. Loan growth was 9.1% versus 6.8%.
• The Midwest accounted for 44 of 84 US bank deals announced in the first half of 2026, 52.4% of the total. Midwest pricing averaged 150% of tangible book across disclosed transactions.

Sources: CBI analysis of FDIC BankFind data as of September 4, 2026, and FDIC Call Report data at June 30, 2026; transaction status reviewed September 9, 2026.

• 85% of surveyed banks say AI is a competitive advantage, but 31.8% have any AI or machine learning in production, 12.2% call their strategy resourced, and 9.5% say their data is ready.
• Technology allocation is uneven: one cited survey found 93% of spend going to tools and 7% to the people expected to use them. Separately, 68% of banks do not measure technology-project return.
• Only 9% of banks have a named CEO successor with both a timeline and a plan, down from 17% a year earlier; 42% have candidates but no timeline or action plan.
• Community bank noncurrent loans grew from $14.37 billion to $16.19 billion while allowance coverage fell from 164% to 146% over the report's comparison.

Sources: 2026 surveys cited in the report, Bank Director 2026 Compensation and Talent Survey, and CBI analysis of FDIC Call Report data.

• The report separates patterns another analyst could draw from the figures from five observations Steve has made while working with community banks.
• The observations cover leadership dependency risk, the branch relevance gap, deposit drift, the AI readiness divide, and execution consistency under pressure.
• Each observation states whether the available figures support it, are merely consistent with it, or do not speak to it. The report does not claim that a Call Report measures culture or behavior.
• One example: the 22-point efficiency gap between the median and 90th-percentile bank in the $100 million, $1 billion band is real data; what happens inside those banks is the author's interpretation of what the data leaves unexplained.

Sources: The State of Community Banking 2026, Part VI; public data and field observations are labeled separately in the report.