KBRA’s Perspective on Bank M&A: Trends and Ratings Implications

Coming out of the 2024 U.S. presidential election, banking industry pundits once again touted that the era of bank mergers had returned. As expected, a more bank-friendly regulatory environment has emerged under the new administration, spurring activity across deals of varying sizes (see Figure 1). So far in 2025, deal volume has increased modestly relative to recent years, although the trend has arguably resembled more of a swell than a tsunami to this point.

Based on our discussions with numerous management teams across our approximately 150 rated bank universe, the primary constraint is not regulatory. To the contrary, approval timelines have materially shortened in recent months (see Figure 2). For instance, many transactions are receiving regulatory approval within three to nine months, depending on their size and complexity, with smaller deals generally being approved more quickly.

Further, recent changes to accounting guidelines, in theory, simplify some of the more onerous…