BAI Banking Strategies: We’re heading into 2025’s final months, so is this still the year of banking M&A?

Is 2025 on track to be the biggest year for M&A activity? That’s a big topic of debate right now. The rapid changes to U.S. policies created M&A hesitation earlier this year.

In fact, several M&A deals have been announced this year, to name a few.

That includes Huntington’s acquisition of a Texas bank for nearly $2 billion, Columbia Banking System’s acquisition of Pacific Premier Bancorp for $2.04 billion, and the merger of Mechanics Bank and Homestreet, valued at over $3.3 billion (the largest deal we’ve seen so far). Additionally, Glacier Bancorp has been involved in multiple deals, including acquisitions of Bank of Idaho and Guaranty Bancshares.

The drive towards consolidation is multifaceted, encompassing the need for enhanced scale to manage interest rate risk, achieve cost efficiencies in the face of rising operational expenses, and make necessary investments in cutting-edge technologies. Additionally, the burgeoning costs of regulatory compliance and the imperative to strengthening market positioning in a slower-growth economy are pushing banks towards M&A activities.