At the end of each year, the editorial staff at American Banker predicts who will have the biggest impact on the banking industry in the year ahead. For 2025, we chose 25 bankers, regulators, politicians, and execs in fintech, big tech, and payments — plus one pop superstar — and explained why we thought they would make a difference, positive or negative. Below, we examine whether we were right or wrong in each case. Processing ContentSee who we chose this year: 26 people who will change banking in 2026.  ...

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Core Viewpoint - The recent approval by the Chongqing Financial Regulatory Bureau for Harbin Bank to acquire two rural banks in Chongqing marks a significant step in the bank's expansion strategy in the southwest region, reflecting a broader trend of regional banks pursuing cross-province acquisitions to establish branches [1][5][6]. Group 1: Cross-Province Acquisitions - Harbin Bank's acquisition of Chongqing's Shapingba and Dadukou rural banks follows its earlier acquisition of Youyang Rural Bank, enhancing its presence in the region [6][31]. - This acquisition strategy is not unique to Harbin Bank; Jiangsu Bank has also successfully established a branch in Ningbo through a similar acquisition [7][32]. - The model of acquiring rural banks to establish branches has become a common approach for city commercial banks, allowing them to inherit the assets, liabilities, and customer base of the acquired banks [8][33]. Group 2: Policy Background - The regulatory environment for city commercial banks has shifted from leniency to tightening over the past decade, with significant restrictions on cross-regional operations [9][34]. - Historical regulations have limited city commercial banks from expanding beyond their local jurisdictions, with exceptions made for resolving high-risk institutions [9][34]. Group 3: Reform Wave - The ability of city commercial banks to establish branches across provinces is part of a broader reform aimed at accelerating the resolution of risks in small and medium-sized banks [10][35]. - As of mid-2025, 100 rural banks have undergone mergers or restructuring, indicating a significant increase in consolidation efforts compared to previous years [10][35]. Group 4: Regulatory Logic - Despite speculation about a loosening of cross-regional restrictions, industry professionals believe that such acquisitions will not become a standard practice and will continue to follow a case-by-case approval process [11][36]. - Regulatory bodies are expected to maintain strict oversight, ensuring that only proposals that effectively address risk and promote stable operations are approved [12][38]. Group 5: Bank Considerations - Acquiring existing rural banks allows city commercial banks to save capital and quickly gain access to established customer bases and operational networks [14][39]. - Harbin Bank reported a revenue of 7.386 billion yuan in the first half of 2025, with a net profit of 915 million yuan, highlighting the financial pressures that make acquisitions an attractive growth strategy [17][42]. Group 6: Future Trends - The trend of reducing the number of small and medium-sized banks while improving their quality is expected to continue, with a peak in mergers and restructurings anticipated in 2025 [18][45]. - The disappearance of rural banks reflects a strategic shift in the banking sector towards consolidation and enhanced risk management capabilities [20][47]. - Future acquisitions may occur, but this does not imply a complete lifting of restrictions on cross-regional operations for city commercial banks [23][49].

Core Insights - The portfolio of 1578 Partners, LP outperformed the S&P 500 in Q3 2025, with a gross return of 14.37% compared to the S&P 500's 8.12% [3][4] - The generative AI investment boom is a significant driver of economic stability and stock market performance amid political and economic uncertainties, with major tech companies planning to invest over $300 billion in AI infrastructure in 2025 [5][6] - Becton, Dickinson and Company (BDX) is highlighted as a new investment opportunity, with a strong market position and a significant upcoming transaction expected to unlock shareholder value [12][19] Portfolio Performance - The portfolio's year-to-date performance is 36.44%, significantly higher than the S&P 500's 14.83% [3][4] - Key contributors to the portfolio's performance include Interactive Brokers Group, which rose 24.2%, and Alphabet, which increased by 37.3% during the quarter [7][9] - The portfolio composition at the end of the quarter was 93.9% equities and 6.1% cash, with a new position initiated in BDX [11][12] Investment in Becton, Dickinson and Company - BDX is a global medical technology company with annual revenues exceeding $21 billion, known for its essential medical products [13][14] - The company is undergoing a significant transaction to divest its Biosciences & Diagnostics Solutions businesses, which will provide $4 billion in cash and shares valued at approximately $18.8 billion to shareholders [16][17] - The divestiture is expected to enhance BDX's valuation, with projections suggesting a fair value of around $300 per share post-transaction [19][20] Market Context - Despite economic challenges, the S&P 500 showed resilience, gaining 2.0% to 3.0% each month during Q3 2025 [4][6] - Financial markets exhibit low credit spreads and high confidence in the economic outlook, with expectations for the Federal Reserve to cut interest rates [6][20] - The investment landscape is characterized by a focus on AI and technology, with venture capital firms investing heavily in AI startups, totaling $192.7 billion in 2025 [5][6]

Core Insights - The government shutdown has not significantly impacted most banks, but small and midsized banks are facing challenges due to halted Small Business Administration (SBA) loan processing [1][2][3] - Hundreds of billions of dollars in SBA loans are frozen, affecting community bankers and small business owners [4][6] - The shutdown has led to a complete halt in new SBA loan originations since October 1, which could negatively impact bank earnings in the fourth quarter [8][10] Impact on Small and Midsized Banks - Small and midsized banks are more exposed to government programs that are currently on hold, particularly SBA loans [3][9] - The SBA guarantees loans, making them attractive for smaller banks, but the shutdown prevents banks from collecting fees associated with these loans [5][6] - Small business owners are at risk of going under due to lack of access to capital during the shutdown, which could further strain banks if these businesses fail [6][8] Future Outlook - Analysts hope for a quick reopening of the government to recapture lost loan activity, but prolonged shutdowns could extend the impact into future earnings seasons [9][10] - The expectation is that there may be a surge in loan transactions once the government reopens, but the uncertainty remains a concern for bank earnings [9][10]

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Financial Data and Key Metrics Changes - The company reported a net income of $22.5 million, with a net interest margin (NIM) of 4.59%, return on equity (ROE) of 17.64%, and return on assets (ROA) of 2.13% [3][13] - Diluted earnings per share (EPS) were $2.67, and tangible book value was reported at $59.98 [3][14] - Total assets decreased slightly to $4.17 billion from $4.28 billion at the end of the previous quarter [13][14] Business Line Data and Key Metrics Changes - Loan purchases amounted to $152.7 million with an invested amount of $144.6 million, marking one of the largest purchase quarters in recent years [4][10] - Originations totaled $134 million, with a notable increase in SBA activity, funding $42 million and selling $53 million of loans [5][10] - The allowance for loan losses was a credit of $435,000, reflecting strong asset quality [15] Market Data and Key Metrics Changes - The company noted a robust purchase pipeline driven by M&A activity and repositioning in commercial real estate loans [4][10] - The origination pipeline is described as full, with expectations for continued strong growth [10] Company Strategy and Development Direction - The company is focusing on strategic investments in personnel and technology to ensure long-term success [16] - There is optimism regarding the new insured small business loan product launched in partnership with NEWITY, which has seen early success [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the loan activity despite challenges posed by a government shutdown affecting SBA loan processing [8][25] - The company anticipates a ramp-up in SBA activity once the government reopens, with expectations of returning to previous volume levels [25] - Management highlighted the importance of maintaining strong asset quality and being vigilant against potential fraud risks in lender finance [44][46] Other Important Information - The company experienced a decrease in net interest income (NII) due to higher average cash balances and a reduction in transactional income compared to the previous quarter [14] - Changes in state tax laws have impacted the effective tax rate, which is expected to stabilize at around 31%-32% for the remainder of the year [55] Q&A Session Summary Question: Change in cost structure with NEWITY - The cost structure changed to a flat fee per loan submitted instead of a split in the gain on sale [21] Question: Expectations for SBA loan gains in Q4 - Management indicated uncertainty due to variables like the duration of the government shutdown but expressed optimism for a return to previous volume levels [25] Question: Increase in professional fees - The increase was attributed to temporary employees and heightened legal fees related to new products [26] Question: Health of lender finance portfolio - Management reassured that they are closely monitoring the quality of their lender finance portfolio and have robust verification processes in place [44][46] Question: Visibility on loan payoffs - There were larger payoffs than typical this quarter, with expectations that payoffs may increase in a declining interest rate environment [51][52] Question: Lower tax rate explanation - The lower tax rate was due to state law changes and a tax benefit from stock vesting, which is not expected to recur [55]

Financial Data and Key Metrics Changes - The company reported a net income of $22.5 million, with a net interest margin (NIM) of 4.59%, return on equity (ROE) of 17.64%, and return on assets (ROA) of 2.13% [3][13] - Diluted earnings per share (EPS) stood at $2.67, with tangible book value just under $60 at $59.98 [3][4] - Total assets decreased slightly to $4.17 billion from $4.28 billion at the end of the previous quarter [13] Business Line Data and Key Metrics Changes - Loan purchases amounted to $145 million, while originations were $134 million, with the loan book remaining flat overall [13][14] - The company funded $42 million in SBA loans and sold $58 million, resulting in gains of $4.2 million, down from $8.2 million in the previous quarter [15][16] - The average loan balances decreased by $92 million compared to the previous quarter due to timing of transactions [7] Market Data and Key Metrics Changes - The company noted a robust purchase pipeline driven by M&A activity and repositioning of commercial real estate loans [4][10] - The SBA activity was impacted by a government shutdown, which halted new originations since October 1 [8][9] Company Strategy and Development Direction - The company is optimistic about its new insured small business loan product with NUITY, which has seen about $10 million closed since its launch [9] - The management emphasized a disciplined approach to credit while expecting strong growth in both purchased and originated loans [10][53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future loan growth despite challenges posed by the government shutdown affecting SBA loans [25][52] - The company anticipates a ramp-up in SBA activity once the government reopens, with continued strong demand expected [25][26] Other Important Information - The company is experiencing a change in its cost structure with NUITY, moving from a gain-sharing model to a flat fee per loan submitted [21][22] - The effective tax rate for the quarter was lower due to state law changes, with expectations for the rest of the year to be around 31% to 32% [55] Q&A Session Summary Question: Change in cost structure with NUITY - The cost structure changed to a flat fee per loan submitted instead of a split in the gain on sale [21] Question: Expectations for SBA loan gains in the fourth quarter - Management indicated uncertainty due to variables like the duration of the government shutdown but expressed optimism for a return to previous volume levels once reopened [25] Question: Increase in professional fees - The increase was attributed to temporary employees and heightened legal fees related to new products [26] Question: Quality of lender finance portfolio amid industry concerns - Management reassured that they have robust monitoring and verification processes in place to mitigate fraud risks [44] Question: Visibility on loan payoffs this quarter - There were larger payoffs than typical, with expectations that this could continue in a declining interest rate environment [51] Question: Lower tax rate explanation - The lower tax rate was due to state law changes and stock vesting impacts, with expectations for a higher effective tax rate moving forward [55]

Financial Data and Key Metrics Changes - The company reported a net income of $22.5 million for the quarter, with a net interest margin (NIM) of 4.59%, return on equity (ROE) of 17.64%, and return on assets (ROA) of 2.13% [3][12] - Diluted earnings per share (EPS) were $2.67, and tangible book value was reported at $59.98 [3][12] Business Line Data and Key Metrics Changes - Loan purchases amounted to $152.7 million with an invested amount of $144.6 million, marking one of the largest purchase quarters in recent years [4] - Originations totaled $134 million, with a notable decrease in the originated loan book by $39 million, while the purchase loan book increased by $31 million [6][12] - The SBA activity included funding of $42 million and sales of $53 million, with a significant decrease in gains due to changes in SBA rules [5][14] Market Data and Key Metrics Changes - The company noted a robust origination pipeline, with a strong performance in the real estate and financing markets, despite some loan payoffs [8][10] - The average loan balances decreased by $92 million compared to the previous quarter, impacting interest income [7][12] Company Strategy and Development Direction - The company is optimistic about its new insured small business loan product with NUITY, which has seen a strong start since its launch [9] - There is a focus on maintaining a disciplined credit approach while pursuing growth opportunities in both purchased and originated loans [10][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future loan growth, citing a healthy pipeline and the expectation of increased demand once the government reopens [24][52] - The company is closely monitoring asset quality and has implemented measures to mitigate risks associated with fraud in lender finance [43][45] Other Important Information - The company experienced a decrease in total assets from $4.28 billion to $4.17 billion, attributed to paydowns and payoffs [12] - Capital remains strong with a tier one leverage ratio of 12.21% [13] Q&A Session Summary Question: Changes in cost structure with NUITY - The cost structure changed to a flat fee per loan submitted instead of a split in the gain on sale [20] Question: Expectations for SBA loan gains in Q4 - Uncertainty exists due to variables like the government shutdown, but a ramp-up in activity is expected once operations resume [24] Question: Increase in professional fees - Temporary employees and heightened legal fees related to new products contributed to the increase [25] Question: Health of lender finance portfolio - The company maintains a robust monitoring system to mitigate fraud risks and is comfortable with asset quality [43][45] Question: Visibility on loan payoffs this quarter - A larger amount of payoffs than typical was observed, impacting transactional income [48] Question: Lower tax rate this quarter - Changes in state apportionment laws and stock vesting contributed to the lower tax rate, with expectations of a 31% to 32% effective tax rate going forward [53][54]

Financial Performance - Net income for Q1 FY26 was $22541 thousand[72] - Basic EPS was $272 and Diluted EPS was $267[4] - Return on Equity was 1764% and Return on Assets was 213%[4] Loan Portfolio - Total loan volume reached $3205 million in Q1 FY26[4] - Purchased loans amounted to $1446 million invested on $1527 million of UPB, representing a 947% purchase price[4] - Originated loans totaled $1338 million[4] - SBA loans originated were $420 million and SBA loans sold were $527 million, resulting in a gain on sale of $41 million[4] - The total loan portfolio balance was $3752951 thousand, with an average balance of $416 thousand and a weighted average LTV of 49%[6] National Lending Portfolio - National Lending purchased loans had a total balance of $2406506 thousand with 3624 loans and an average balance of $664 thousand[6] - Direct originated loans in the National Lending Division had a total balance of $490770 thousand with 83 loans and an average balance of $5913 thousand[6] - Lender Finance loans in the National Lending Division had a total balance of $722341 thousand with 115 loans and an average balance of $6281 thousand[6] - The weighted average rate for National Lending as of September 30, 2025, was 798%[4]