U.S. Banks’ Urge to Merge
This article appears in the October issue of Global Finance Magazine.
U.S. banks are merging again as a rare combination of a friendlier regulatory environment, excess capital among the bigger players, and the rising cost of competing in artificial intelligence continues to drive broad industry consolidation.
S&P Global Market Intelligence data shows that 81 banking deals were announced in the U.S. in the first half of 2026, the largest first-half tally since 2021.
The resurgence in banking mergers and acquisitions follows a regulatory shift that began in May 2025, when the Office of the Comptroller of the Currency restored expedited review and a streamlined application process for the industry’s mergers. Two months later, the Federal Deposit Insurance Corp. rescinded its 2024 policy statement on bank mergers and returned to its earlier guidelines, broadening the regulatory overhaul.
The practical effect has been a shorter path from announcement to completion: Median deal time fell from 187 days in 2024 to 134 days in 2025 and 94 days so far this year, according to S&P Global.
Bankers responded with a series of deals, including Huntington Bancshares’ acquisitions of Veritex and Cadence Bank and PNC’s purchase of FirstBank. By the fourth quarter of 2025, bank deal value had reached $26.3 billion, the highest quarterly total since early 2019.
“If you are a bank looking ahead at succession planning or at the technology investments to compete as you get bigger, there is this window within this administration,” said Catherine Mealor, a Keefe, Bruyette & Woods managing director. “If you think you might want to sell within the next three or four years, you might as well go now. You can get it closed quickly.”
According to PwC research, five banking deals worth more than $5 billion were announced in the latest four-quarter period, pushing aggregate deal value to roughly the same level as the previous four quarters despite a lower volume of transactions.
The consolidation pressure is also coming from the capital side of the equation. Recent research by Bain & Co. found that 17 U.S. lenders each held more than $10 billion in excess capital at the end of June, with seven above $20 billion.
The same research also found that deals combining scale with new capabilities delivered total shareholder returns 14 to 18 percentage points above scale-only transactions over the past two years, as banks face rising costs to build and maintain technology and artificial intelligence capabilities.
Bigger Deals Become the Norm
That appetite for scale is visible in this year’s largest transactions. Santander’s $12.2 billion acquisition of Webster Financial created a $327 billion-asset bank, while Fifth Third’s $10.9 billion purchase of Comerica produced the ninth-largest U.S. bank. Pinnacle Financial Partners’ merger with Synovus created another institution with more than $120 billion in assets.
Sellers, though, may not agree with buyers regarding a franchise’s worth. The median price paid for a bank seller is about 141% of tangible book value, according to Piper Sandler, while 68% of banks surveyed by Bank Director say they would require at least 175% to sell.
Thomas Monteiro is a contributing writer based in Spain.
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