Banks are almost always thinking of their long-term value. And with a favorable regulatory environment, some regional banks are looking to strike deals by merging with other firms in a bid to compete with larger banks.
There have been 25 bank deals since the start of 2026, totaling $15.11 billion, according to S&P Global.
Top bank M&A deals so far this year
- Banco Santander is set to buy Webster Financial in a $12.2 billion all-cash deal, the company revealed Feb. 3.
- U.S. Bancorp is buying investment firm BITG for up to $1 billion, The Minnesota Star Tribune reported.
- Columbia Financial and Northfield will merge in a $597 milllion deal that will create New Jersey’s third-largest regional bank, according to NJBIZ.
- In upstate New York, Arrow Financial shared that it will acquire Adirondack Bancorp for $89.1 million.
That’s after a stellar 2025, which saw 179 deals, according to Ankura’s annual banking industry outlook.
The increase in bank M&A has nothing to do with bank stress and everything to do with faster regulatory approval. But the banking merger boom could stall if the war in Iran continues.
A favorable M&A environment for banks
Analysts say there is a bank appetite for consolidation. That means more bank mergers are likely in the coming months, as M&A activity overall has surged since last year.
In general, consolidation is expected due to a favorable regulatory environment, with deals being approved faster, according to Moody’s Ratings analysts. Research firm Ankura reports that lower interest rates have also helped increase interest in mergers, with the steady flow of deals signaling more to come.
Margaret Tahyar, a partner at Davis Polk law firm, told TheStreet that during the Biden administration, it could take as long as 17 months to get regulatory approval. Now, it’s down to three to four months, she said.
Rahul Chandarana, banking and capital market sector leader at EY-Parthenon, told TheStreet there are several signs of increased bank mergers. Banks have more capital, and several have already gone through mergers.
Many of these bank mergers have to do with strategy, David Danielson, managing director at accounting and advisory firm Wolf & Company, told TheStreet.
For smaller banks, acquisitions are often due to aging leadership, rising costs, and demand for technology, while larger banks “are using scale to spread technology and compliance costs, expand into adjacent markets, and strengthen their competitive position, rather than responding to immediate financial pressure.”
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Iran war puts damper on bank plans
Future bank merger plans could all be derailed due to tensions in the Middle East.
Stocks and oil prices have fluctuated since Feb. 28, when the U.S. and Israel launched strikes on Iran.
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The conflict has caused unease across the globe, with the International Energy Agency head Fatih Birol saying the global economic impact is likely to be worse than the 1970s oil shock, The Associated Press reported.
Talks of bank mergers seem to be on pause for now, especially for regional banks that lend heavily to oil-dependent manufacturing sectors, said Tahyer.
But if the price of oil steadies and the conflict in Iran declines, Tahyar says the chance of a flurry of bank M&A activity is very likely.
“What we’ve seen since [the start of the Iran situation] is a sense of pause,” said Tahyar. “And I think things will pause a little bit until those things are sorted out. But I think of that as a temporary dip, because the industrial logic for the technology and digital investments and competing in the digital age, none of that’s going away.”
Related: Global central banks signal shocking shift on interest-rate bets
