Nevada Bankers Prepare for 2026 Challenges Amid Changing Landscape

Nevada’s banking sector is bracing for a series of challenges as it approaches 2026. Bankers in the state must navigate a complex landscape shaped by shifting government regulations, sophisticated fraud schemes, and fluctuating interest rates. The dual pressures of regulatory compliance and evolving customer expectations are pushing financial institutions to adapt swiftly in order to thrive.

Interest Rate Predictions for 2026

Interest rates will play a crucial role in shaping the banking environment in 2026. These rates are influenced by factors such as inflation, credit demand, and government monetary policy. The Federal Reserve’s federal-funds rate, which was reduced three times in 2025, primarily drives short-term rates. While most economists anticipate only one rate cut in 2026, the actual trajectory remains uncertain.

According to Bruce Ford, Senior Vice President and Nevada Regional Manager for City National Bank, there is a general expectation for a gradual decline in short-term interest rates. “Market conditions can change, but that’s certainly the consensus forecast,” he stated. Conversely, Jack Prescott, Executive Vice President and Chief Banking Officer for Plumas Bank, predicts more aggressive action, suggesting that there could be two or three reductions, each by a quarter point. He emphasized the potential influence of a new Federal Reserve chairman, whose term begins in May 2026.

Another perspective comes from Terry Shirey, CEO and President of Nevada State Bank, who believes interest rate expectations will fluctuate based on economic data and political developments. He noted, “The market’s telling us that rates are probably going to be pretty stable through the end of 2026 – maybe a slight reduction by year-end.”

Economic fluctuations and changing job and inflation data will ultimately dictate the interest rate landscape, according to Denette Suddeth, Regional President for PNC Bank. “If you look back at 2025, some folks were expecting a lot more rate changes than what we actually experienced,” she explained.

Adjusting to Deposit-to-Loan Ratios

The banking sector is also re-evaluating its deposit-to-loan ratios in the wake of multiple bank failures in March 2023. This crisis, which began with Silicon Valley Bank, highlighted the vulnerabilities of banks, especially smaller institutions. Since then, many banks have adopted more conservative targets for their loan-to-deposit ratios.

Ford reported a shift in targets over the last few years, stating that the acceptable ratio has fallen from above 100 percent to below 90 percent. Shirey explained that a well-structured loan-to-deposit ratio reflects a bank’s liquidity. “The more stable the deposit portfolio is, the higher that loan-to-deposit ratio could be,” he said.

Prescott echoed this sentiment, noting that the 2023 bank failures prompted a renewed focus on maintaining good liquidity. He prefers a loan-to-deposit ratio of around 80 percent, emphasizing the importance of a cushion against unexpected economic events. Meanwhile, Suddeth mentioned that PNC’s loan-to-deposit ratio stands at a healthy 75 percent, indicating strong funding from stable customer deposits.

Combatting Cyberfraud

Cybersecurity remains a top priority for banks, as the rise of digital banking has led to an increase in fraud attempts. Shirey noted the ongoing battle against fraud, stating, “We have a whole army of people who wake up every day thinking about cybersecurity and protecting our clients.” He recommended that business clients utilize Positive Pay services to mitigate check fraud risks.

Investments in cybersecurity are also a focus for Prescott at Plumas Bank, where efforts include ongoing education for both employees and customers. “We have joined up with cybersecurity professionals to sponsor seminars for business owners in the community,” he explained. Suddeth from PNC added that the bank combines its cyberfraud team with physical and insider threat monitoring to enhance protection for customers and staff.

Phyllis Gurgevich, President and CEO of the Nevada Bankers Association, emphasized the need for comprehensive measures to combat fraud. She advocates for stronger regulations on telecommunications and social media companies to prevent the spread of fraudulent activity. “Preventing fraud and scams has to be the biggest challenge that banks are facing right now,” Gurgevich stated.

Regulatory Adjustments and Branch Evolution

The banking sector in Nevada is also anticipating changes to regulatory frameworks. Ford indicated that while the current administration has expressed intentions to lower regulations, he remains cautious about the outcome. Prescott shared a similar outlook, expecting a mild year for new regulations while anticipating relief from burdens in existing rules.

Gurgevich provided insights into upcoming legislation, including the implications of the Dodd-Frank Act. She highlighted the need for regulations to be appropriately sized to avoid hindering small businesses seeking loans. “We want to bring that rule back to the original congressional intention,” she explained.

As customer preferences shift towards online banking, the role of traditional bank branches is evolving. Shirey noted a decline in branch traffic, exacerbated by the pandemic, which has forced banks to adapt. “We’re ensuring that our branch colleagues are adding value to clients when they do come into the branch,” he stated.

Prescott emphasized the importance of human interaction, stating that Plumas Bank is focusing on delivering a consultative experience. “We’re in the people business,” he remarked. Meanwhile, Suddeth mentioned PNC’s efforts to streamline online account openings while maintaining its branch network for customer engagement.

In summary, Nevada bankers are preparing for a year of adaptation and potential growth in 2026. With cautious optimism, they are navigating interest rate uncertainties, adjusting loan-to-deposit ratios for stability, enhancing cybersecurity measures, and responding to evolving regulatory landscapes. As they continue to adapt their branch networks to meet customer needs, the focus remains on fostering relationships and safeguarding clients’ financial interests.