With a sharp eye for market dynamics and a deep understanding of the financial sector’s regulatory currents, Priya Jaiswal has become a go-to authority on the forces shaping the U.S. banking landscape. She joins us today to unpack the recent surge in M&A activity, offering a look inside the boardrooms where the industry’s future is being decided, from the pressures on mid-tier banks to the rising influence of technology and activist investors.
Regulatory approval times for bank deals have reportedly shrunk from over a year to just a few months. How does this accelerated timeline change the risk calculation and negotiation strategy for potential buyers, and what steps should they take to prepare for this faster process?
It’s a complete game-changer. For years, the specter of an 18-month or even two-year approval process hung over every potential deal. It was a massive risk. You could agree to a price, and by the time regulators gave the green light, the entire economic environment could have shifted, making the deal far less attractive. Now, shrinking that wait to just three or four months fundamentally alters the equation. Buyers can breathe a little easier, knowing the deal they negotiate is largely the deal they’ll get. For sellers, it means less time in a vulnerable state of limbo. To prepare, buyers must have their houses in order before even approaching a target. This means having their due diligence teams on standby, their financing locked in, and a crystal-clear integration plan ready to execute. The window to act is shorter, so you can’t afford to be figuring things out on the fly.
With the industry landscape potentially forming a “barbell” shape, what specific strategic pressures are facing mid-tier regional banks? Describe the key decisions they must make now to either grow through acquisition or risk becoming an acquisition target themselves.
The “barbell” is a very real and pressing reality for banks in that $10 billion to $100 billion asset range. They’re caught in the middle. They lack the immense scale and resources of the four behemoths, but they’re also too large to be the nimble, community-focused players on the other end. The pressure is immense. They face mounting technology costs and competitive threats from fintechs like Chime that are chipping away at their customer base. The key decision is stark: eat or be eaten. They must actively decide whether to be a consolidator or to position themselves for a strategic sale. We’re seeing a real “everyone is a potential buyer” vibe from these larger regionals, who know that if they don’t grow, they risk becoming a target for an even larger player looking to expand its footprint.
As larger regional banks consolidate, the traditional buyer pool for sub-$1 billion asset banks is shifting. What new types of buyers, like fintechs or credit unions, are emerging, and what unique challenges or opportunities do these unconventional partnerships present for smaller banks?
This is one of the most fascinating shifts we’re seeing. For decades, a small community bank knew its likely buyer was a regional bank from a neighboring state. But as those regionals grow, they’re less interested in tiny acquisitions. This has created a vacuum that’s being filled by a new cast of characters. Credit unions have become more aggressive buyers, which presents opportunities for a good price but can come with the challenge of merging a for-profit culture with a not-for-profit one. More disruptive are the fintechs and private investor groups hunting for a bank charter. For a small bank, selling to a fintech could mean a significant technology upgrade and a new lease on life, but it also means navigating a completely different corporate culture and a potentially jarring strategic vision. It’s forcing these smaller banks to think much more creatively about their future.
We’ve seen activist investors publicly pressure banks to either pursue a sale or avoid an acquisition. How is this trend influencing M&A strategy at the board level, and what defensive measures should management teams prepare if they find themselves targeted by an activist?
Activism is injecting a new layer of accountability and, frankly, fear into the boardroom. The actions of firms like HoldCo Asset Management have sent a clear message: your M&A strategy is now subject to intense public scrutiny. A management team can no longer assume they can make a deal and just sell it to shareholders later. They now have to be prepared to vigorously defend their decisions from day one. This makes buyers a little more hesitant, knowing a poorly justified deal could make them the next public target. In terms of defense, the best shield is a strong offense. This means having an ironclad, well-articulated strategic plan, maintaining constant and transparent communication with your major shareholders, and stress-testing every potential acquisition to ensure it can withstand the harshest criticism. You have to anticipate the activist’s arguments before they even make them.
Beyond market pressures, how are advancements in financial technology, such as the potential of stablecoins, specifically influencing M&A discussions? Please share an example of how a bank might alter its buy-or-sell strategy based on its digital capabilities or lack thereof.
Technology is no longer a secondary consideration in M&A; it’s often the primary driver. The conversation around digital assets and stablecoins, for instance, has really accelerated this. A smaller community bank might look at the investment required to build out a competitive digital platform and simply conclude it’s not feasible. That realization often pushes them to the seller’s side of the table, seeking a partner with the resources they lack. Conversely, imagine a regional bank that has invested heavily in its digital infrastructure. They might specifically target a smaller bank that has a loyal, sticky deposit base but is technologically decades behind. The acquirer sees a huge opportunity, calculating they can buy the franchise, plug it into their advanced platform, and achieve massive efficiencies and growth that the smaller bank could never accomplish on its own.
Given the potential for political shifts after upcoming elections, how does this uncertainty factor into the timing of M&A deals? Describe the conversations you hear from bank leaders about the “window of opportunity” and their urgency to act sooner rather than later.
There is a palpable sense of urgency. The current regulatory environment is seen as more constructive and predictable than it has been in years, and no one believes it will last forever. Bank leaders are acutely aware that the political pendulum can swing back after the 2026 midterms or the 2028 presidential election, potentially bringing a much more stringent regulatory approach. This has created a clear “window of opportunity.” The conversations I’m having are all about timing. Boards are saying, ‘If we are ever going to do a strategic deal, now is the time to act.’ This political uncertainty is a powerful catalyst, compressing deal timelines and pushing banks that were on the fence to finally make a move before that window closes.
What is your forecast for bank M&A?
I believe we are on the cusp of a significant acceleration in M&A activity that will continue well into 2026. The pent-up demand from the slower years earlier in the decade is undeniable, and all the necessary ingredients are in place: clearer regulatory timelines, rising stock prices, and intense strategic pressure. I wouldn’t be surprised if the number of announced deals doubles what we saw in 2025. This wave will further entrench the “barbell” structure of the industry, creating a more competitive landscape among a smaller number of larger, more capable regional banks. For smaller institutions, the pressure to find a partner will only intensify, leading to more creative and unconventional deals with new types of buyers. The clock is ticking, and many feel the time to act is now.
