Federal Reserve Board Announces Termination of Enforcement Actions with Gardner Bancshares, Inc. and Small Business Bank
WASHINGTON — In a significant regulatory development for the banking sector in the American Midwest, the Federal Reserve Board officially announced on Friday the complete termination of all active enforcement actions previously imposed on Gardner Bancshares, Inc. and its subsidiary, Small Business Bank, both located in Lenexa, Kansas.
The announcement, released at 11:00 a.m. Eastern Daylight Time, marks the resolution of a multi-year supervisory oversight period for the Kansas-based institutions. According to the central bank’s formal release, the Federal Reserve lifted a series of strict administrative measures that had been put in place over the course of several years to address compliance, operational, and capital adequacy concerns at the bank and its holding company.
The termination of these supervisory orders becomes officially effective as of October 13, 2026, bringing an end to the formal regulatory constraints that governed the institutions’ operations.
The federal regulatory actions being dissolved include a foundational Cease and Desist Order issued jointly to Gardner Bancshares, Inc. and Small Business Bank on September 1, 2023. That initial order had required both the bank holding company and the underlying depository institution to take remedial measures to improve their financial condition, risk management practices, and overall governance structures.
In addition to the 2023 directive, the Federal Reserve has terminated a subsequent Cease and Desist Order that had been issued exclusively to Small Business Bank on November 13, 2024. That secondary order addressed further operational or compliance milestones that federal examiners deemed necessary for the institution to meet under the federal banking laws overseen by the Board of Governors of the Federal Reserve System.
Furthermore, the central bank has lifted a Prompt Corrective Action (PCA) directive that was issued to Small Business Bank just months ago, on June 29, 2026. Prompt Corrective Action mandates are statutory supervisory tools triggered when an insured depository institution falls below specific capital thresholds defined by federal law. The termination of this specific PCA order on October 13 indicates that Small Business Bank has successfully restored its capital levels to required statutory minimums and resolved the underlying financial metrics that triggered the prompt intervention by regulators.
The simultaneous lifting of these three distinct regulatory measures signals that federal examiners are now satisfied with the corrective steps taken by the leadership, board of directors, and management teams of Gardner Bancshares, Inc. and Small Business Bank. Over the duration of these enforcement actions, institutions under such mandates typically operate under heightened regulatory scrutiny, requiring frequent reporting, restrictions on certain types of business growth or asset expansion, and the mandatory submission of comprehensive compliance plans to the Federal Reserve Bank of Kansas City and the Board of Governors in Washington, D.C.
For community banks and bank holding companies, the successful termination of a Cease and Desist Order and a Prompt Corrective Action directive represents a critical milestone in restoring operational independence and market confidence. It allows management to shift its focus away from intensive regulatory remediation and back toward serving its customer base, executing its business strategy, and pursuing sustainable financial performance within the regulated banking framework.
The Federal Reserve maintains a comprehensive public database of historical and active regulatory enforcement actions, allowing financial analysts, industry participants, and members of the public to search for formal agreements, civil money penalties, cease and desist orders, and prompt corrective action directives across the United States banking system through its official online portal.
Media organizations and industry reporters seeking further details or official commentary regarding Friday’s announcement may contact the Federal Reserve Board’s media relations office via email at [email protected] or by telephone at 202-452-2955.
