Sixteen U.S. bank M&A deals were announced in March, pushing total first-quarter announcements to 46, according to S&P Global Market Intelligence data.

Deal valuations slip

The median deal value-to-tangible common equity ratio for deals announced in the first quarter was 142.1%, below full-year 2021's 152.3%.

Deal values dip following 2021 surge

Total deal value in the first quarter was $15.15 billion, down from $25.63 billion in the fourth quarter of 2021, but up from $11.22 billion in the first quarter of 2021. Full-year 2021 logged the highest number of large bank deals in more than two decades.

Megadeals dry up

Toronto-Dominion Bank's $13.67 billion deal for First Horizon Corp., announced Feb. 28, was the only deal worth more than $350 million announced during the first quarter.

2 March deals among most expensive announced in 2022

On March 10, Phoenix-based Arizona FCU announced it would acquire Lake Havasu City, Ariz.-based Horizon Community Bank in a deal worth $91.4 million at a deal value-to-tangible common equity ratio of 210.4%, the seventh most expensive deal announced since the beginning of 2021 and the second-most expensive in 2022. Among the 20 most expensive deals announced since 2021, three have been credit union-bank mergers.

On March 29, Stuart, Fla.-based Seacoast Banking Corp. of Florida announced it would acquire Miami-based Apollo Bancshares Inc. for $168.3 million at a deal value-to-tangible common equity ratio of 177.7%, making it the third most expensive bank deal announced since the start of 2022. The deal was also the largest announcement for the month of March. This was Seacoast's first acquisition of the year after it announced three deals in 2021, two of which were among the 20 most expensive deals announced since Jan. 1, 2021.

Midwest banks most targeted

Wisconsin's six deal announcements led the nation in the first quarter, followed by Illinois' four announcements.

M&A outlook cloudy with a chance of inflation

Normally, rising interest rates would boost bank bottom lines and stock prices making M&A more likely, but as the Federal Reserve aggressively raises rates to combat inflation, worries are growing that the economy could be in for a bumpy 2022. That, coupled with regulators signaling greater scrutiny of large bank deals, could put a damper on deal activity over the rest of the year.

Click here for a list of pending and completed M&A deals announced since Jan. 1, 2012.