Eight US bank M&A deals were announced in June, bringing the 2023 year-to-date total to 41 deals, compared to 79 deals announced over the same period in 2022. Aggregate deal value fell to $617.8 million, from $3.50 billion in the year-ago period, according to S&P Global Market Intelligence data.

The median deal value-to-tangible common equity for deals announced in the second quarter was 119.2% — the lowest quarterly mark in at least four years.

2 credit union-bank deals announced in 1 week

On June 1, Daleville, Ala.-based All In Federal Credit Union announced its acquisition of Dothan, Ala.-based SunSouth Bank, which has one branch in each Houston County and Barbour County, Ala. Upon completion, All In expects to have 33 locations, according to a news release announcing the deal.

The deal puts Alabama in the third spot for states with the most banks targeted by credit unions since 2015 with seven deals, alongside Georgia. Florida is in the top spot with 15 deals, followed by Illinois with 11 deals.

The deal was immediately followed by another credit union-bank deal when Albuquerque, NM-based Nusenda Federal Credit Union announced its first bank buy with its planned acquisition of Las Cruces, NM-based Western Heritage Bank on June 6. The deal will expand Nusenda FCU's branch footprint in southern New Mexico and into Texas — both states which have never seen a credit union-bank deal before.

Credit union-bank deal activity has been particularly slow this year, with only four deals announced so far, compared to a record 16 announcements in 2022. Among the four announced deals, Nusenda FCU is the largest buyer, with total assets of $4.14 billion at March 31, while All In FCU is the second-largest buyer, with total assets of $2.81 billion.

Southeast region targeted 5 times in June

Of the eight deals announced in June, five of the banks targeted were headquartered in the Southeast, bringing the region's total number of targets this year to seven. It is now the second-most targeted region, overtaking the West, which had a total of six target banks.

The Midwest, on the other hand, is still the most targeted region, with a total of 23 target banks.

On June 28, Winston-Salem, NC-based Piedmont Financial Holding Co., the parent company of Piedmont Federal Savings Bank, announced the acquisition of Wake Forest, NC-based Wake Forest Bancshares Inc. for $36.8 million, making it the first target bank for North Carolina 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, 2022. – Read more M&A news.

Aside from North Carolina, five more states — Alabama, Georgia, Mississippi, New Mexico and South Dakota — had their first bank targeted this year in June.

Meanwhile, Illinois was targeted for the sixth time this year as Muscatine, Iowa-based Central Bancshares Inc. announced its acquisition of Moline, Ill.-based McLaughlin Holding Co. on June 2, making it the most targeted state in the US, while Kansas and Ohio tied for the second spot, with 4 targets each.

Increased regulation might have the biggest impact on smaller banks

Citizens Financial Group Inc. CFO John Woods said at a recent industry conference that banks with less than $100 billion in assets might see a larger impact from the additional regulation of heightened capital requirements, which is expected to trickle down to smaller banks, potentially pushing them to consider M&A. "It just adds another maybe issue that smaller banks will have to deal with. But — and therefore, maybe at the margin — it encourages more sort of M&A," Woods said.