By Paul Davis
What a difference a year makes.
Twelve months ago, bank M&A was a slog with approvals that stretched out a year, currencies that couldn’t clear sellers’ asks, and interest rate shock that turned bond portfolios into potential capital holes.
In recent months, that picture changed quickly, driven by clearer regulatory messaging, firmer trading multiples, and shorter approval times that improve the math on dilution and earnback periods. Through Sept. 30, more than 125 deals were announced, surpassing $24.2 billion in aggregate value and exceeding last year’s tally. Conversations are also accelerating.
“Things are certainly heating up on the M&A front,” Heath Fountain, CEO of Colony Bankcorp in Fitzgerald, Georgia, says in a recent interview. “There are a lot more conversations happening and a lot more openness to deals.”
Why messaging matters
The 2026 thesis follows a narrative from recent weeks. Deal flow has accelerated, average seller size is higher, and premium stock deals are back on the table. Three big acquisitions were announced in the third quarter: Pinnacle Financial Partners’ merger with Synovus Financial ($8.6 billion value); PNC Financial Services Group’s pending purchase of FirstBank Holding ($4.1 billion); and Huntington Bancshares’ agreement to buy Veritex Holdings ($1.9 billion).
Fifth Third Bancorp kicked off the fourth quarter by agreeing to buy Comerica for $10.9 billion — the biggest pure-play bank merger in years, then Huntington joined the conversation again by announcing a $7.4 billion deal to grow its Texas and mid-South footprint with Cadence Bank. These deals signal that bigger buyers and sellers, premium stock consideration and wider strategic footprints are coming back into favor
The big change involved messaging from Washington since President Trump returned to the White House, with regulators signaling that previous obstacles to big mergers were less of an issue.
The Office of the Comptroller of the Currency effectively nullified a 2024 final rule that created heightened scrutiny for deal that would create banks with more with $50 billion in assets. The FDIC withdrew a policy statement that expanded the scope of merger reviews to include broader economic impact assessments and evaluating if a merged entity would pose less financial risk than its predecessors.
Net-net, buyers now expect clearer criteria and shorter queues for non-controversial transactions, especially for acquirers with clean supervisory profiles. The election created “a seismic change in the banking world and the M&A world,” says Christopher Olsen, managing director at Olsen Palmer, an investment bank.
Banks also had to work through the shock of the Fed’s aggressive policy of raising interest rates, which contributed to large unrealized securities losses, the deposit panic in early 2023, stagnant bank stock prices and overall trepidation about large-scale consolidation.
Root causes for M&A still exist
Issues tied to sharply rising rates obscured the fact that many drivers of consolidation never subsided, including management and board succession, revenue headwinds, intensified nonbank competition, and the need to build scale and invest more in technology.
“The pace of change in technology is driving people to kind of reexamine their business and ask if they have what it takes for the next 5 to 10 years to keep up … or if they will be better off partnering with someone,” Fountain said. “It’s happening at all levels from smaller banks to regionals.”
“The factors that have historically fueled M&A are more pronounced now,” Olsen adds. “I can make the argument that some of the technology around AI and regulatory changes around stablecoin have further heightened the importance of scale. When you talk about succession and retirements — a skinny talent pool is exacerbating the situation. On top of that, you layer in the regulatory piece in the form of a flashing green light for activity.”
Faster approvals improve the math
Speed is showing up in actual transactions, not just sentiment, with the potential to improve the calculations for deals. Atlantic Union Bankshares expected a six-month approval process when it agreed in October 2024 to buy Sandy Spring Bancorp in Maryland. It received all regulatory approvals seven weeks after applying, which allowed the Virginia bank to close its deal a quarter ahead of schedule.
“We were flabbergasted to receive approval so quickly,” CEO John Asbury said, noting that a complete filing and clean supervisory profile helped. “You could also argue that we went to the regulators with a very well formulated plan. We set it up for success.”
Tempo matters with bigger mergers, too. Fifth Third and Comerica recently said they anticipated a March 31 close — less than six months from announcement — in messaging that could encouraging other would-be acquirers to consider deals.
Asbury said that expedited approval and closing let his team move quicker to cut costs, find revenue opportunities and gel the banks’ cultures. A shift to faster signoffs “is going to be conducive to more mergers,” he said.
Pulling the close forward pulls accretion forward in the form of day one cost actions, vendor harmonization and quicker earnback periods. Expedited approvals could also convince more acquirers to be less selective, which could accelerate dealmaking.
Olsen noted that many buyers had been very “picky and selective” due to concerns that they might only get “one shot every 12 to 18 months” under the previous regulatory regime. “Now, buyers seem more willing to relax their qualifications, buy smaller banks and be a little more open-minded.”
The shift has prompted some banks, including Equity Bancshares in Wichita, Kansas, and Prosperity Bancshares in Houston, to line up overlapping acquisitions, a strategy that was virtually nonexistent two years ago.
Though another announcement isn’t imminent, Fountain said Colony has the capacity to strike another deal even though it is still in the process of buying TC Bancshares in Thomasville, Georgia. He noted, however, that capacity and sequencing matter. “We have a lot of comfort in our team’s ability to do that,” Fountain said. “We can manage our project load. We would have to look at what we’re doing and self-govern to make sure we don’t mess up the execution on one deal because we’re trying to get the next one done too fast.”
Caution still plays a role
To be sure, recent developments do not mean that the pace of consolidation will immediately return to what it was before the pandemic. There are fewer banks today then where were five years ago, and it is unclear how many active buyers exist.
Acquirers are focusing on the pay-to-trade ratio, or a deal’s price-to-tangible book value multiple divided by the buyer’s own multiple. Most buyers want to keep the ratio at or below 100%, which means that a buyer trading at 150% of tangible book value will be hesitant to pay more than that for a target. A key reason for this is a goal of minimizing TBV dilution and reducing earnback periods.
It is not a hard-and-fast rule: buyers can pay more if a deal improves strategic scale, expands their footprint or provide entry into scarce markets — or instances where a seller has very clean credit. At the same time, many potential sellers still think they are worth more than what a buyer wants to pay, creating a spread between buyer and seller that would need to be addressed and overcome through careful conversations and due diligence. Unrealized losses remain a concern, and recent credit cracks could create a need for more due diligence over certain loan exposures.
“There are more sellers than buyers today, and the sellers still … have unrealistic expectations about pricing,” said Andrew Samuel, CEO of Harrisburg, Pennsylvania-based Linkbancorp.
Discipline governs pricing and structure. While the year-to-date median price-to-tangible common equity reached 146.3% — the highest since 2022 — it remains well below pre-pandemic levels, based on data compiled by S&P Global Market Intelligence.
Pricing should improve steadily. Bank shares are edging higher, which will improve acquirers’ buying power as trading multiples rise. Banks with the right size and scale have been able to command higher premiums: FirstBank Holding in Colorado is selling to PNC at 234.2% of its TCE, Comerica is selling to Fifth Third Bancorp at a 172.8% premium, and Synovus is getting a 170.1% premium.
Getting it done
The current narratives in bank M&A are preparation and professionalism. Policy is clearer, the queue is shorter, and the market is open to deals that are complete, credible and fast. While that doesn’t make deals easy, it does make them doable for teams that have already done the upfront legwork. Look for buyers to keep pricing discipline with exceptions only for scarcity, scale, footprint and unmistakably clean credit. Sequence overlaps will take place for banks with leadership bandwidth and clear conversion calendars.
For sellers, mark honestly, close the bid-ask gap with facts, and decide if a certain premium now beats an uncertain premium down the road. For buyers, have a clean supervisory profile, clear integration plans, and a narrative that ties cost saves and customer benefit to your community footprint. With faster closings, every month you pull forward is a month accretion arrives early.
Each side must bear in mind that the window isn’t open indefinitely. Next year’s midterm elections and another looming presidential election signal the potential for another shift in policymaking. “We know that we have this window open and, if we need to get something done, we need to get it done now,” Fountain says.
Contributing editor Paul Davis is editor of The Bank Slate.
