Texas leads charge as bank M&A snaps back

Texas bank M&A is on pace to reach highs not seen in six years as M&A accelerates.

Thirteen deals have been announced in the Lone Star State this year as of Aug. 18, already above the totals seen in the last two years and just one deal short of the 14 announced in 2022. The flux is putting the state on pace to have the most deals since 2019, when 20 were announced, according to data from S&P Global Market Intelligence.

This article is part of S&P Global Market Intelligence's series of state profiles, which take an in-depth look at M&A and key banking metrics for banks and thrifts with less than $10 billion in assets.

Texas also has the most deals of any state so far this year, well above Georgia, Illinois and Missouri, which are tied for second place with eight deals each. With 112 bank deals announced through Aug. 18, Texas makes up 12% of the country's year-to-date activity.

Assets and deposits sold in transactions targeting Texas banks are also surging, sitting at $26.45 billion and $23.10 billion, respectively. Those totals are higher than nearly every year since at least 2014, only falling short of the vastly higher numbers recorded in 2020 when large deals inflated assets sold, and just slightly below 2021 totals.

"I have more people right now that say they're a buyer than I've ever had in my career. And they're not necessarily public banks either. They could be $500 million banks, and they're trying to buy a $100 million bank," Performance Trust Managing Director Dan Bass said in an interview.

The increase in Texas M&A has been largely driven by smaller, rural bank deals. Of the past 20 deals, 14 targets and nine buyers had assets under $1 billion.

This is in part due to the large number of community banks headquartered in the state. There are 327 banks with assets under $10 billion in the state, 75 of which have over $1 billion in assets, leaving 252 banks with assets below $1 billion.

"There are a lot more rural banks in Texas. You're going to see a lot more of those banks sell," Stephens analyst Matt Olney said in an interview. "If you miss one growth opportunity, there'll always be another one you can look at."

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Many buyers see Texas community banks as an attractive source of funding, according to Bass at Performance Trust.

"If your core deposits in rural Texas have been there for a while and have low cost of deposits, that's extremely valuable," Bass said.

Texas community banks posted 5.1% median deposit growth for the 12 months ended June 30, compared to 4.5% for all community banks in the US.

Attractive deposit bases have garnered a high price for some sellers, such as in Prosperity Bancshares Inc.'s acquisition of American Bank Holding Corp., which recorded one of the year's highest deal value to tangible common equity ratios at 226.0%.

While small deals held the line with sheer numbers, larger, splashy deals struck by out-of-state buyers have contributed to the spike in assets sold.

In the 13 deals announced in Texas year to date through Aug. 18, eight buyers were headquartered within the state while five were out of state. However, out-of-state buyers accounted for 82.14% of total assets sold in 2025.

Of the 20 most recent deals targeting Texas banks, those with buyers headquartered outside Texas include Ohio-based Huntington Bancshares Inc.'s acquisition of Veritex Holdings Inc.; Louisiana-based Investar Holding Corp.'s acquisition of Wichita Falls Bancshares Inc.; Montana-based Glacier Bancorp Inc.'s purchase of Guaranty Bancshares Inc.; Mississippi-based Cadence Bank's deal with Industry Bancshares Inc.; and Colorado-based The RJC Trust's acquisition of Falcon Bancorp Inc.

Out-of-state buyers are attracted to the high-growth markets found in Texas, Bass said. The state's population is expected to grow by 5.6% between 2025 and 2030, compared to 2.4% for the US during the same time period, according to Claritas Pop-Facts data. The state's biggest metropolitan statistical areas, Houston and Dallas, are expected to grow even faster at 6.1% and 7.1%, respectively.

"The demographics of Houston are better than the demographics of the entire state of Louisiana," Bass said. "A lot of the slow-growth markets, you're just beating up on each other on rate to try to steal business, whereas in Texas, it seems like there's so much new growth, you don't really have to do that as much."