2026 Pub. 7 Issue 3

Congratulations to the banks celebrating May and June anniversaries as chartered institutions!

For more than a decade, community bank bond portfolios languished under the weight of the Fed’s zero interest rate policy (ZIRP). Portfolios filled with higher-yielding bonds that matured or got called saw their yield slowly erode as the average bank portfolio yield fell from more than 5% in 2007 to less than 2% in 2021. In fact, bank holdings of low-yielding bonds (I’ll define that as less than 2%) have exceeded their holdings of high-yielding bonds (greater than 4%) for the last 13 years. But the Fed’s aggressive tightening cycle of 2022-2023 and the subsequent surge in bond yields have helped banks turn the page on the era of low-yielding bonds.

Artificial intelligence is quickly transforming financial services. For community banks, this shift brings both opportunity and challenge. It can strengthen fraud prevention, improve efficiency and deliver deeper customer insight. At the same time, it is accelerating AI-driven fraud and social engineering threats.

Your bank has an opportunity to frame your next Bank Secrecy Act/Anti-Money Laundering/Countering the Financing of Terrorism (BSA/AML/CFT) examination, much as you do your Community Reinvestment Act (CRA) exam, by preparing a summary of the “performance context” within which you operate.

When asked why he robbed banks, notorious 1930s-era bank robber Willie Sutton famously replied, “Because that’s where the money is.” While his response was purposely tongue-in-cheek, stopping criminals is a reality that community banks face daily.

It’s becoming a frequent and unfortunate occurrence to hear community bankers recounting stories of fraud, and the attacks range from sophisticated digital scams to paper-based fraud rings. On one hand, we’re dealing with AI-induced deep fakes and advanced phishing scams. On the other, we’re having a real “Back to the Future” moment as old-school check washing makes a comeback, supported by digital image-altering technology that makes it simpler than ever before.

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CBA is now inviting members to volunteer for its 2026 committees. Serving on a committee gives you a direct role in shaping the Association while building valuable relationships with fellow community bankers. Strong participation strengthens the impact of our work. Download the 2026 CBA Committee volunteer form.