The bank merger landscape is shifting, with expectations of accelerated deal-making as the industry consolidates under a more favorable regulatory regime. Management consultants at Bain anticipate that an enlarged bank assembled through mergers will create a fifth institution with assets topping $1 trillion within four years.
Bain Predicts Growth in the $1 Trillion Club
In a new report on bank mergers, Bain partners Joe Lischwe, Dirk Vater, Joe Fielding, and Phil Anselmino wrote, “By the end of 2030, we expect the ranks of this $1 trillion club to swell from four to between five and seven as large regional banks consolidate; in turn, that’s likely to fuel a reduction in large regionals, from 49 at the end of 2025 to between 30 and 40 in 2030.”
Regulatory Environment Spurs Deal Activity
The regional-bank merger wave that swept through the industry as the second Trump administration took office had a lot to do with regulators’ new propensity to approve deals quickly. That could encourage more deals over the next two years, in advance of the next presidential election.
Meg Tahyar, a partner and co-head of the financial institutions group at the law firm Davis Polk, told American Banker, “The limited window of opportunity is the risk that we get another kind of administration in 2029, and they go back to the kind of behavior we were seeing during the early Biden era.” At that time, large bank M&A deals were more closely scrutinized and took longer to be approved. Tahyar added that the window won’t “automatically slam shut, but it might get narrower” in 2029.
Santander's Deliberate Approach to Webster Integration
The year’s largest bank merger so far, Banco Santander’s deal for Webster Financial, will lead to a deliberate integration, according to the Spanish bank’s head of U.S. operations. Santander U.S. CEO Christiana Riley said the bank wants to avoid customer disruptions. A core systems conversion will likely take place by the end of 2027, but no changes are expected within the next 12 months, meaning brands and systems will remain unchanged for now.
“We’re not going to do anything that’s premature or not appropriately planned out,” Riley told American Banker. “We can’t confuse our customers as to who can serve them until we can serve them across a single platform.”
Investment Banking and M&A Boost Noninterest Income
Investment-banking income from helping other companies conduct mergers and acquisitions provided a strong boost last year for some of the largest banks, according to the Top Performing Banks ranking. Matthew Prince, a business analyst at Capital Performance Group, said that 2025 was also a favorable year for mergers and acquisitions, which helped boost noninterest income at banks such as JPMorganChase and Morgan Stanley.
“I guess the regulatory environment right now, it’s more conducive to mergers and acquisitions, which helps bring in noninterest income through M&A, and that’s been elevated recently,” he said.
M&A Drives Deposit Growth for Mid-Size Banks
For banks with between $10 billion and $100 billion of assets, the secret to growth in 2025 was M&A. Banks in that asset tier grew core deposits 8%, faster than the sector overall, mainly because of mergers. Adam Mustafa, president of the banking data and advisory firm Invictus Group, explained, “If we connect the dots here, there’s a segment of banks within the mid-size regional bracket here who really were dependent on M&A to grow deposits. Because if they didn’t do M&A, their deposits would have grown at a slower rate than the market.”
Largest Deals Now Close Fastest
Two years ago, the largest bank mergers and acquisitions by value took, on average, more than a year to close, much longer than smaller deals. In a sharp reversal, the biggest deals are now taking the fewest days to be finalized, according to a research report from Brean Capital. The shift reflects a favorable regulatory environment under the second Trump administration, which has reinstated previous merger standards and allowed for expedited merger reviews.
During the Biden administration, bank M&A deals, especially large ones, faced heavy scrutiny. “The regulatory environment has become friendlier under the new administration,” Brean Capital analyst Brian Martin told American Banker. The largest deals are now “clearly mirroring the smaller deals,” he added.
