Community Bank Earnings for 2Q 2026: NIM compression, loan growth, and expensive deposits

For the 2nd quarter of 2026, Community Banks saw some slight Net Interest Margin (NIM) compression, loan growth increased especially around C&I lending, underwriting tightened for C&I loans while CRE loans remained steady, and the deposit base remained sticky, but funding costs remain higher. There is a question now around the Federal Reserve and whether they will increase interest rates in the second half of 2026. This episode reviewed a blog post from PCBB titled “H2 2026 Outlook: Mixed Signals for Community Bank Earnings.” A link to the blog post has been included below. Link: H2 2026 Outlook: Mixed Signals for Community Bank Earnings