The Banker Next Door

SBA approvals are down 18% in 2026 compared to 2025. Loans are down because the SBA had to fix a lot of the problems coming out of the Biden administration. Namely, lax underwriting, which led to delinquencies, and expanding the programs to some lenders that should not have had access. SBA loans to specialty trade contractors fell 22% through mid-2026 due to a new eligibility rule barring green card holders. Furthermore, the SBA has proposed changes to NAICS codes and lifting size limits for what is considered a small business. Both proposals are horrible and should not move forward. This episode reviewed three articles from The Business Journals (subscription required) titled “SBA lending is down 18% so far this year – here’s why”, “Subcontractors see SBA loans dry up amid a perfect storm of troubles”, and “The SBA pushes back drastic overhaul of small business size limits after criticism.”

On the eve of a new documentary titled “You Can See Everything” coming out in October, I thought it would be a good idea to revisit the epic disaster that was Elizabeth Holmes and Theranos. Theranos was a “Decacorn” start up, meaning it had a $10B valuation, that provided state of the art blood-testing equipment that was supposed to revolutionize the healthcare industry. The company’s product and claims were found to be fraudulent. CEO Elizabeth Holmes and her boyfriend at the time, Ramesh “Sunny” Balwani were both convicted and sent to prison. They are both currently still serving their prison sentences. The real questions around this case are how and why? How did Theranos reach such heights before fraud was found? Why did Elizabeth and Sunny do it? This episode reviewed an article from Investopedia titled “Theranos: A Fallen Unicorn.” A link to the article is included below.
Link: www.investopedia.com/articles/investing/020116/theranos-fallen-unicorn.asp

Bank News: WestStar Bank agreed to acquire Southwest Capital Bank, financial terms of the deal were not disclosed. First National Bank of Omaha continues to grow through smaller acquisitions. The bank has announced two acquisitions in the last four months. M&F Bancorp rejected unsolicited offer from mystery bank and decided to move forward with Optus Financial merger. P&S CU agreed to merge with FireFighters CU. New Haven Teachers FCU agreed to merge with Nutmeg State Financial CU. OCC conditionally approved national bank trust charters for Bastion Platforms Trust Co., Agora National Trust Bank, and Catena Trust Bank. Nola Bank gets up and running in Louisiana. Portrait Bank gets up and running in Florida. BCB Bancorp sells $205M in problem loans. Federal Reserve proposed stablecoin rules. Bank of American plans to double AI budget next year and battles for business banker talent. The fight of cross-boarder payments is heating up. This episode reviewed multiple articles from Banking Dive, The Wall Street Journal and S&P Global Market Intelligence (subscription required).

This video is a clip from BND: Strategy Room Live Stream on September 19, 2026. The AI trade is imploding! In less than 30 days the narrative went from everything is great, we are making money, its IPO time, to there might be a few problems with our Frontier AI, to these AI systems might destroy us, to please regulate us now!!! The IPOs are on hold, the revenue streams are all BS, companies have blown through their AI tokens, Chinese competition is increasing, and they are burning through money they don’t have. Answer: Regulatory Capture! The tech bros are looking for a bailout in the form of regulation, so they can secure their monopolies by building a regulatory moat around themselves. Will the government oblige them? Will something get done before they implode?

The Banker Next Door (BND) weekly live stream show. Strategy Room provides financial news, commentary, top stories in the business world, economic indicators, and all things banking for the week.

A new independent review conducted for the Federal Reserve by Starling Advisory Group on the failure of Silicon Valley Bank examined the role of the Federal Reserve supervisory staff to ask if they failed in their oversight of the bank. The report detailed seven critical findings. In releasing the findings, Michelle Bowman stated that the Fed supervisory staff should have known and that SVB’s failure fundamentally shook public confidence in the effectiveness of bank supervision. However, this report did not address the root cause of the run on deposits. It’s connection with the crypto market. The fact that SVB’s chief risk officer role was vacant at the time of failure. That the bank’s CEO was on the board of the San Francisco Federal Reserve, which oversaw the bank. Furthermore, the report downplays the role of social media in driving the run on the bank. This report, while making some good points, falls short of getting to the heart of what happened. This episode reviewed an article from CNBC, The Epoch Times (subscription required) and the Federal Reserve report on Silicon Valley Bank. A link to the Federal Reserve report is included below.
Link: Speech by Vice Chair for Supervision Bowman on initial findings from independent review of Silicon Valley Bank

This video is a clip from BND: Strategy Room Live Stream on September 19, 2026. As the situation with Mark Walter and his companies continues to unfold, it appears that he used retirement assets for his spending binge on professional sports franchises. As this comes to light, BlackRock is hard at work to get Private Credit and other alternative assets stuffed into your 401(k). The narrative here is that suddenly Wall Street wants everyone with a 401(k) to have access to the best investments because they care so much about your well-being. If I may offer an alternative idea, Wall Street has a steaming pile of you know what that they would like to pass on to John Q Public!

De Novo or start up credit unions are not performing well. Of the last five de novo credit unions, two have been liquidated and one is currently operating as “uncapitalized.” The two credit unions that were liquidated both failed within six months of starting, making them some of the quickest failures since 2016. Former National Credit Union Administration Chairman Todd Harper stated, “New credit unions often unfortunately do fail, and they fail quickly because of a lack of expertise, a failure to follow their business plans or unanticipated consequences.” Since 2016, only 28 new credit unions have been formed. This episode reviewed an article from S&P Global Market Intelligence (subscription required) titled “De novo credit unions are failing faster, underscoring capital headwinds.”

Bank News: PNC, Regions, and Citizens executives don’t want to be distracted by potential M&A deals. PNC could be open to M&A, but current valuations make a deal unlikely. Citizens is open to bolt-on deals if they focus on the payments area. Bank7 is seeking to purchase 100% of Century Financial. Bank charter approvals more than double from 2025. Synapse victims turn to small-claims court as they are still trying to recover funds years later. Enova scraps merger deal with Grasshopper Bank. Nubank launches in the U.S. through a partner without full regulator approval. Truist exists near-prime auto lending business by selling $5.5 billion in loans. Citizens Bank sues SoFi for potentially poaching mortgage employees. Japanese Bank SMBC is recruiting in Charlotte. FDIC’s Travis Hill pushes for faster merger review process. Michelle Bowman outlines three potential changes to stress-test calculations and reviewed a new report on the failure of Silicon Valley Bank. Conference of State Bank Supervisors float AI framework for banks and examiners. This episode reviewed multiple articles from Banking Dive and S&P Global Market Intelligence (subscription required)

This video is a clip from BND: Strategy Room Live Stream on September 19, 2026. The Clarity Act failed to advance through the Senate on a 50-49 vote. It needed 60 votes to pass. This failure puts this bill in real jeopardy as the midterm elections approach and both houses of Congress have gone on recess. At the same time, the SEC cleared the way for tokenized stock. Was this a smart move on the part of the SEC?