Twenty-five bank mergers were completed, and many more were penned, during the first quarter of 2025. However, nothing dampens a buyer's appetite more than uncertainty, which we have in abundance right now.
In addition to highlighting completed transactions, this week's article looks at several others in the works that involve out-of-state buyers. Most are expected to be completed by the end of the third quarter, but we would not be surprised to see a slow-down in merger activity, while the economy digests the impact of the Trump Tariff Wars.
Bank Acquisitions Increasingly Involve Out-of-State Buyers
After the Federal Reserve cut short-term interest rates three times in the last four months of 2024, expectations were that we would see a broad swell in the number of bank merger and acquisition deals this year. The first three months did, indeed, fulfill that prediction with 25 completed bank combinations (listed on page 5).
Quite a few other combinations were penned in the past six months as well. However, there is nothing that squelches a buyer’s appetite more than uncertainty (especially when talking about transactions worth millions or even billions of dollars).
Uncertainty is something we have in abundance right now. Two large bank acquisitions inked in 2024 were completed this year, prior to Trump’s Tariff Wars. Others may not be so fortunate.
The largest two (so far this year), each valued at about $2 billion, can be found on page 5. They are:
The acquisition of the $17.535 billion 4-Star Independent Bank, McKinney, TX (3076) and its 100+ branches by 5-Star SouthState Bank N.A., Winter Haven, FL (33555), (assets over $46 billion) was completed in January;
Then, in February, 4-Star UMB Bank N.A., Kansas City, MO (8273), with assets of $50 billion, acquired 5-Star HTLF Bank, Denver, CO (58458), with $17.2 billion in assets and well over 100 branch offices.
The third largest, worth about $1.6 billion, was the purchase of the $14 billion asset 5-Star Sandy Spring Bank, Olney, MD (4865) by the $24.5 billion 5-Star Atlantic Union Bank, Richmond, VA (34589). This transaction was completed earlier this month.
The largest deal announced in 2024, by far, the $35 billion acquisition of 4-Star Discover Bank, Greenwood, DE (5649) by 5-Star Capital One N.A., McLean, VA (4297) looks as though it will secure all necessary approvals prior to the May 19th deadline. In spite of anti-trust concerns and the large amounts of subprime concentrations at these two banks, approvals have slowly, but surely, been granted.
Attorney Generals in New York and California would like to halt it, but many have already tried and failed. This marriage looks as though it will happen... unless either the bride or groom get cold feet and back out.
No one is getting cold feet in Hawaii. We expected a shake-up in Hawaii banking after learning that Hawaiian Electric Industries (HEI), parent of 4-Star American Savings Bank, Honolulu, HI (32526), was at least partially to blame for the fires that decimated Lahaina and killed more than 100 people. A sale of the bank was under consideration. Instead, independent investors swooped in and purchased a non-controlling interest in American SB’s common stock. HEI retained a non-controlling 9.9%.
While American SB was not sold, another Hawaii bank, 4-star Territorial Savings Bank, Honolulu, HI (30836) was acquired by 5-Star Bank of Hope, Los Angeles, CA (26610). Bank of Hope, which focuses on the Korean-American population, already operates 49 branches in eight states. This expansion adds about $2.2 billion in assets and about 30 new branches, all in the Aloha State.
Another transaction involving a California Bank was announced this January. 5-Star Plumas Bank, Quincy, CA (23275) plans to acquire the $658 million asset 3½-Star Cornerstone Community Bank, Red Bluff, CA (58411) and its four branch offices for $64.6 million. This transaction, expected to be completed in the second half of the year will create a $1.2 billion asset bank with 19 branches in Northern California and Nevada.
Another West Coast transaction: 5-Star Mechanics Bank, Walnut Creek, CA (1768) came to the rescue to purchase 3-Star HomeStreet Bank, Seattle, WA (32489) after another buyer fell through.
HomeStreet Bank’s $8 billion in assets and 61 branches (CA-23,HI-4,OR-3,WA-31) is an ideal match for Mechanics, which currently operates 122 branches. All except one are in California. The other is in Oregon. This will help Mechanics in its march to the North.
Moving East: on March 1, 2025, the $18.6 billion asset 5-Star WesBanco Bank, Wheeling, WV (803) acquired the $8.6 billion asset 5-Star Premier Bank, Youngstown OH (29845). WesBanco Bank already operates in Ohio as well as 5 additional states.
You may have noticed a trend. All of the transactions we have mentioned involved multiple states (as do several on page 5). Here is a rundown of some of the other out-of-state transactions that are currently in the works:
5-Star Cadence Bank, Tupelo, MS (11813) plans to acquire 5-Star First Chatham Bank, Savannah, GA (57252);
5-Star FirstBank, Nashville, TN (8663) agreed to buy 5-Star Southern States Bank, Anniston, AL (58558);
5-Star Glacier Bank, Kalispell, MT (30788) is back at it with plans to acquire 5-Star Bank of Idaho, Idaho Falls, ID (26403); and
Battle Financial, Inc., Edwards, CO has applied to become a bank holding company with the acquisition of 5-Star Stearns Bank N.A., Upsala, MN (9336).
Most of these transactions are expected to be completed by the end of the third quarter.
