Bank M&A Deal Tracker: Activity expected to pick up in back half of 2025

Improved dealmaking conditions are setting the stage for a US bank M&A boom in the second half.

With 70 deal announcements totaling $10.30 billion in value between January and June, the year is off to a slightly better start than in the first half of 2024, when 63 deals with a total value of $6.12 billion were disclosed, according to S&P Global Market Intelligence data. However, this is still not the rebound that M&A advisers anticipated at the end of 2024.

Nonetheless, the industry is hopeful that there will be a wave of bank M&A activity in the second half of 2025 and into 2026 due to easing regulatory scrutiny, a healthier economy, bank stock recovery and forecast interest rate cuts before the end of the year.

"I think we're going to be busy in the next six months," John Roddy, Raymond James Financial Inc.'s co-head of financial services, said in an interview. "The next 12 months, call it, July 1, 2025, to July 1, 2026, could be more active than 2021," when 200 deals with a total value of $76.73 billion were announced.

The market has already begun to benefit from these conditions, with bank M&A gaining positive momentum in the past few months. While just eight deals were announced in June, half of them had a value over $200 million at announcement.

The largest of these transactions is Commerce Bancshares Inc.'s planned acquisition of FineMark Holdings Inc. for $580.9 million. That deal also ranked as the fourth-largest transaction announced in the first half of the year.

Of the 10 largest US bank deals announced during the first six months of 2025, four were disclosed in June. Of the five largest US bank deals, all but one were announced in the second quarter.

Bank management teams are feeling more confident to get back to dealmaking due to market conditions improving, Matthew Veneri, head of investment banking at Janney Montgomery Scott LLC, said in an interview. Conditions that have created this sense of opportunity include a steady economy, collaborative regulators and the prospect of interest rate cuts, according to deal advisers.

The health of the economy is important to the pace of M&A, and there have been signals over the past few weeks that economic headwinds are abating, Keefe Bruyette & Woods Inc. CEO Tom Michaud said in an interview.

Deal approval timelines are getting faster, which can encourage acquisitive banks to enter into multiple merger agreements per year, according to Veneri. This is a sign of a healthy M&A market, Michaud said.

Adding further tailwinds to bank M&A is the interest rate outlook. Keefe Bruyette & Woods forecasts a 50-basis-point rate cut before the end of the year, which would be bullish for bank earnings, Michaud said. Lower interest rates also help banks with underwater bond portfolios, which, in combination with a steeper yield curve, will be positive for bank earnings.

Potential headwinds

Some advisers are more conservative with their growth expectations for the second half of the year.

"I don't see a wave of activity," Chad Hull, Janney's head of depository investment banking, said in an interview. "I just see maybe a more consistent pace and maybe not that much higher than what we've been doing."

Unpredictable announcements from the Trump Administration and the future of tariffs could threaten an uptick in bank deal activity.

"We've seen a number of M&A transactions, and my thought is that we will see that continue for the rest of the year," James Stevens, bank M&A legal adviser and partner at Troutman Pepper Locke LLP, said in an interview. But "it seems a little bit of a fragile sense of certainty that could change any time with the volatile nature of the administration."

– Access a list of pending and completed M&A deals announced since Jan. 1, 2015. – Access the S&P Capital IQ Pro M&A summary page for US financial institutions. – Read more M&A news.

The risk of volatility still looms as the market awaits Aug. 1, the date that President Donald Trump said tariffs could return to the levels in his initial tariff announcement in early April — which prompted a severe negative market reaction — if countries do not reach trade deals with the US.

Bank management teams are likely not anxiously awaiting this deadline because most US banks are not as directly affected by tariffs. However, if the deadline comes with sweeping tariffs that impact the broader market, it could hurt the bank M&A outlook, Michaud said.

One adviser said some banks could still proceed with deals as they adjust to ongoing uncertainty since the COVID-19 pandemic in 2020.

"The black swan events seem to be more often than not these days, so it's hard to get super confident about things," Raymond James' Roddy said. "I think you're going to see people just feeling like they need to move forward and getting comfortable with the uncomfortable nature of the world we live in and therefore, just transacting."