Ten US bank deals worth about $854.6 million were announced in January, following a decade-plus low of just 98 deal announcements in 2023, according to S&P Global Market Intelligence data.

The median deal value-to-tangible common equity ratio for the deals was 108.0%, compared to 124.5% for full year 2023.

4 credit union-bank deals announced in January

Credit unions kicked off 2024 with four deals for the acquisition of banks.

On Jan. 10, Poughkeepsie, NY-based Hudson Valley CU announced it would acquire Kingston, NY-based Catskill Hudson Bancorp Inc. for $28.6 million, marking the first time a New York-based bank was targeted by a credit union.

The next day, Anchorage, Alaska-based Global FCU announced the acquisition of Renton, Wash.-based First Financial Northwest Bank for $231.2 million, making it largest credit union-bank deal ever and the seventh-largest bank deal announced overall since the beginning of 2023. With a deal value-to-tangible common equity ratio of 156.4%, the transaction is also the fourth-most expensive US bank deal since the start of 2023.

On Jan. 25, Wabash, Ind.-based Beacon CU announced it would acquire substantially all the assets and assume substantially all the liabilities of Salem, Ind.-based Mid-Southern Savings Bank FSB for $45.2 million. Kalamazoo, Mich.-based Advia CU announced the acquisition of Gurnee, Ill.-based Northside Community Bank the same day.

With a deal value-to-tangible common equity ratio of 155.9%, the Beacon CU/Mid-Southern Savings Bank deal was the fifth-most expensive US bank deal announced since the start of 2023.

All three of the deals with announced deal values came with high premiums compared to the banks' share prices prior to announcement as credit unions continue to pay up to acquire banks.

Mergers of equals on the rise

On Jan. 30, San Diego-based Southern California Bancorp. and Oakland, Calif.-based California BanCorp announced a merger of equals valued at $229.9 million, marking the eighth-largest US bank M&A deal since the beginning of 2023.

US bank mergers of equals reached a three-year high in 2023, serving as an attractive option for banks to pair up and gain scale amid a lack of buyers willing to pay attractive premiums due to low stock valuations.

Bank deals by region, state

The West and Midwest tied as the most-targeted regions for the first month of 2024, with a total of three target banks each.

Two of the deals announced in January are for banks located in Washington, tying it with Illinois as the most-targeted state.

Denver-based FirstSun Capital Bancorp on Jan. 16 announced the acquisition of Seattle-based HomeStreet Inc. Valued at $284.8 million, the transaction is the largest US bank M&A deal so far in 2024 and the sixth-largest since the beginning of 2023.

– 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, 2014. – Read more M&A news.

US bank M&A expected to bounce back amid new hurdles

With the recent decline in medium-term interest rates, US bank M&A activity is expected to pick up in 2024 with several US banks already showing interest in pursuing M&A deals.

But a tougher regulatory environment resulting in prolonged closing timelines will likely persist. The Office of the Comptroller of the Currency's efforts to improve transparency of its bank M&A review process also has some worried the changes could discourage dealmaking.