US bank M&A activity remained muted in November, with only five announced deals worth a combined $141.3 million.

The quarter-to-date total deal value of $585.6 million was a 79% drop from the third-quarter total of $2.76 billion, but higher than the first-quarter total of $432.8 million and the second-quarter total of $175.9 million.

The 91 deals announced year to date through Nov. 30 had an aggregate deal value of $3.95 billion, compared to $8.24 billion from the 144 deals announced over the same period in 2022, according to S&P Global Market Intelligence data.

The median deal value-to-tangible common equity ratio for bank deals announced year to date through Nov. 30 was 124.5%, below the 134.8%, 151.8% and 153.4% marks for full year 2020, 2021 and 2022, respectively.

2 deals inked in November among the largest in 2023

On Nov. 13, Terre Haute, Ind.-based First Financial Corp. announced the acquisition of Dayton, Tenn.-based Simply Bank for $73.4 million, making it the 12th-largest US bank M&A deal so far this year.

With the merger, First Financial will enter Georgia with three branches and will expand in Tennessee by nine branches. According to Raymond James analyst David Long, First Financial's acquisition of Simply Bank is "an excellent strategic play" as it expands the bank's foothold into higher-growth southeastern Tennessee and northern Georgia markets.

Meanwhile, Champaign, Ill.-based First Busey Corp. announced the acquisition of Channahon, Ill.-based Merchants and Manufacturers Bank Corp. on Nov. 27 for $42.3 million, marking the 16th-largest US bank M&A deal in 2023.

According to the merger press release, the partnership will enhance First Busey’s growing suburban Chicago market presence by expanding the company's deposit market share in DuPage and Will Counties.

LCNB's second US bank deal of the year

Two deals have been announced by Lebanon, Ohio-based LCNB Corp. this year.

In addition to its previously announced acquisition of Cincinnati Bancorp Inc., completed on Nov. 1, LCNB announced on Nov. 29 that it would acquire Cincinnati-based Eagle Financial Bancorp Inc. for $25.6 million with a deal value-to-tangible common equity of 97.3%.

The transaction is expected to close in the second quarter of 2024. Upon completion, LCNB will have 25 branches and $1.4 billion in deposits within the Cincinnati metropolitan statistical area.

Bank deals by region, state

The Midwest's 39 target banks account for 43% of all M&A transactions announced this year.

Meanwhile, the Southeast had 20 target banks as of Nov. 30, making it the second-most-targeted region, followed by the West with 15 targets.

On Nov. 1, Yuma, Ariz.-based A.E.A. FCU agreed to purchase substantially all assets and assume substantially all liabilities of Goodyear, Ariz.-based West Valley National Bank. The deal is the 11th credit union-bank M&A deal announced in 2023 and is the third target bank headquartered in the Grand Canyon state.

Meanwhile, Muskogee, Okla.-based Firstar Financial Corp. announced the acquisition of Stigler, Okla.-based Stigler Bancorp. Inc. on Nov. 2. The deal marks Oklahoma's first target bank and the South Central region's ninth target bank this year.

– Access the S&P Capital IQ Pro M&A summary page for US financial institutions. – Access a list of pending and completed M&A deals announced since Jan. 1, 2013. – Read more M&A news. – Please click here if you would like to participate in the 2024 US Bank Outlook Survey.

US bank M&A outlook

On Nov. 30, Banc of California Inc. completed its acquisition of PacWest Bancorp in a very brisk 128 days. According to industry experts, the deal was granted a fast green light because it involved a distressed company and is not indicative of easing regulatory environment. High interest rates and a long regulatory approval timeline are still expected to impact US bank M&A activity.

At a recent conference presentation, First Horizon Corp. Chairman, President and CEO D. Bryan Jordan said the company is taking a step back from M&A after the long approval process and eventual termination of its merger with The Toronto-Dominion Bank earlier this year.

On the other hand, JPMorgan Chase & Co. President and COO Daniel Pinto said tougher regulations such as proposals for stronger capital and long-term debt requirements resulting from the bank failures earlier this year will help drive more mergers among large banks in the US.