Federal Reserve Board Announces Termination of Enforcement Actions with Gardner Bancshares, Inc. and Small Business Bank

WASHINGTON — In a regulatory development reflecting a return to compliance and operational stability, the Federal Reserve Board officially announced on Friday, October 16, 2026, the complete termination of longstanding enforcement actions involving Gardner Bancshares, Inc. and its subsidiary institution, Small Business Bank, both based in Lenexa, Kansas.

The regulatory relief, which took formal effect earlier in the week on October 13, 2026, marks a significant milestone for the Lenexa-based financial entities. The decision effectively lifts multiple historical restrictions and administrative measures that had been previously imposed by federal regulators to address governance, operational, or capital adequacy concerns over the past several years.

Overview of Terminated Regulatory Orders

The sweeping announcement from the central bank encompasses a series of three distinct regulatory actions issued across multiple years, signaling a comprehensive clean slate for the holding company and its subsidiary bank.

The first lifted measure is the Cease and Desist Order dated September 1, 2023, which had been jointly issued to both Gardner Bancshares, Inc. and Small Business Bank. This foundational order had required the institutions to correct specific deficiencies and submit to heightened federal oversight regarding their business practices, risk management, and financial standing. After more than three years of remediation efforts, the Federal Reserve has determined that the conditions necessitating this order have been successfully addressed.

Additionally, the Federal Reserve terminated a subsequent Cease and Desist Order specifically directed at Small Business Bank, which was originally dated November 13, 2024. This secondary order had piled further compliance requirements onto the banking institution, reflecting ongoing regulatory scrutiny of its operations during that period.

The final and most recent measure to be lifted is a Prompt Corrective Action (PCA) directive dated June 29, 2026, which had been imposed exclusively on Small Business Bank. Prompt Corrective Actions are statutory mandates triggered when a depository institution falls below certain capital thresholds, requiring swift intervention by regulators to restore capital reserves. The termination of this PCA order on October 13 indicates that the bank has successfully restored its capital position to fully compliant levels, satisfying federal standards of financial health and stability.

Context and Regulatory Background

The termination of these enforcement actions provides a clear window into the lifecycle of federal bank supervision. When the Federal Reserve identifies safety and soundness issues, internal control weaknesses, or capital deficiencies at bank holding companies or state-member banks, it utilizes a graduated scale of enforcement tools. These range from informal supervisory agreements to formal cease-and-desist orders and, in more severe instances involving capital depletion, prompt corrective action directives.

For Gardner Bancshares, Inc. and Small Business Bank, the journey from receiving a stringent cease and desist order in late 2023 to achieving a total termination of all active enforcement actions in October 2026 underscores an intensive period of internal restructuring, remediation, and capital restoration. Banking institutions operating under such regulatory constraints typically must submit detailed action plans, hire independent consultants, enhance internal audit procedures, and regularly report their progress back to regional Reserve Bank officials.

The successful closure of these files demonstrates that Small Business Bank and its parent holding company have met the stringent benchmarks established by federal examiners. With the orders now officially lifted, the institutions are relieved of the specific reporting mandates, prior-approval requirements, and operational restrictions that were tied to the active enforcement mechanisms.

Ongoing Transparency and Media Resources

The Federal Reserve Board maintains a publicly accessible repository of all formal enforcement actions taken against supervised financial institutions. Industry analysts, researchers, and members of the public seeking further historical details regarding the terminated orders for Gardner Bancshares and Small Business Bank can access the original PDF documents through the central bank’s online enforcement database.

For press inquiries regarding the announcement, the Federal Reserve Board’s media relations office has made representatives available via email at [email protected] or by telephone at 202-452-2955.