Bank M&A Surges to 4-Year High: Huntington Acquires Cadence Bank

Regional Banking Consolidation Wave

• 🏦 Huntington Bancshares has acquired Cadence Bank for over $7.4 billion in an all-stock transaction.
• 🚀 This deal follows Huntington's earlier $2 billion acquisition of Veritex, signaling a significant resurgence in bank M&A.
• 📈 Third-quarter bank M&A levels have reached a 4-year high, with the fourth quarter already surpassing these figures due to major acquisitions by PNC, Fifth Third, and Huntington.

Drivers of Increased M&A Activity

• 🎯 Super regionals are driving consolidation to broaden their geographical footprint and increase scale.
• 💰 The primary goal is to better compete for deposits and absorb costs related to regulation and technology.
• ⚖️ Experts anticipate fewer antitrust challenges and faster regulatory reviews under the current administration.
• 📉 Unrealized losses on bank balance sheets have decreased, making them more attractive acquisition targets.

Factors Influencing Deal Closures

• 💡 While consolidation was discussed after the Silicon Valley Bank situation, higher interest rates and record unrealized losses made deal math challenging then.
• ⏳ The length of time required to close acquisitions was a significant deterrent, increasing risks like talent flight.
• ⚠️ Executives were more hesitant to pursue M&A due to these closing delays and a different antitrust environment compared to today.