The targets are getting larger, but banks seemingly remain hesitant to join the M&A dance party.

As of June 14, 27 bank deals worth an aggregate deal value of $5.45 billion were announced in the quarter to date, surpassing the $5.20 billion combined deal value of the 126 bank deals announced over the preceding five quarters. This year's deal volume is so far on pace to surpass 2023's 99 deal announcements, but barring a second-half surge, the 2024 annual total is likely to come up notably short of 2022's 156 deal announcements.

The median deal value-to-tangible common equity ratio for bank deals announced quarter to date through June 14 was 132.2%, the highest mark since the first quarter of 2023.

3 deals in 2 weeks

On May 23, Richland, Wash.-based Gesa CU announced the acquisition of Centralia, Wash.-based Security State Bank, making it the fifth bank targeted in the Evergreen State this year.

A week later, on May 30, Atlanta Postal CU announced the acquisition of Covington, Ga.-based Affinity Bank NA for $145.9 million, with a deal value-to-tangible common equity ratio of 158.8%. The transaction was the 15th-largest and seventh-most expensive US bank M&A deal announced since the start of 2023.

More recently, on June 4, Grand Blanc, Mich.-based ELGA CU announced the acquisition of Vero Beach, Fla.-based Marine Bank & Trust Co., marking the second time a Florida-based bank was targeted this year.

Bank M&A activity is at a six-year high in Washington this year, thanks almost entirely to credit union buyers. Credit unions were among four of the state's five acquirers in 2024 and have accounted for six of the last 10 bank M&A deals announced in the state.

With Atlanta Postal CU's deal, Affinity Bank NA became the fourth Georgia-headquartered target bank this year, making it the second-most targeted state along with Texas this year. The number of deals announced year to date through June 14 in the Peach State also marks the first time the state has seen so many deal announcements in the first half of the year since 2018.

Bank deals by region

Seventeen banks in the Midwest have been targeted in 2024, making it the most-targeted region, followed by the West with 13 target banks.

On May 20, Irvine, Calif.-based CBC Bancorp announced the acquisition of Oakland, Calif.-based Bay Community Bancorp for $126.1 million, making it the ninth-largest US bank M&A deal announced so far in 2024 and 17th-largest since the start 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.

According to investment bankers at the S&P Global Market Intelligence's Community Bankers Conference, buyers are hesitant to strike a deal due to "higher-for-longer" interest rates, lower tangible book values and a tough regulatory environment. However, these are the same reasons why many community banks are looking for a way out.

One solution for smaller community banks looking to sell is through a credit union buyer. The total target assets of banks selling to credit unions hit its highest yearly point ever less than halfway through 2024 as credit unions are playing a larger role and becoming more active in M&A.