Banks Anticipate Smoother Sailing for Consolidation

Under President Donald Trump’s second term, the banking industry is anticipating a more friendly regulatory environment for getting deals approved. This expectation follows policies under the previous administration that actively discouraged consolidation.

In July 2021, then-President Joe Biden issued an executive order that aimed to address concentration and monopolization. This led to increased scrutiny of deals across different industries. Perhaps most famously, the Department of Justice sued to stop the merger between JetBlue Airways Corp. and low-fare carrier Spirit Airlines, arguing that the transaction would lead to higher prices for consumers. The deal was subsequently called off, and Spirit filed for Chapter 11 bankruptcy in November 2024.

More specific to the banking industry, the number of days it took to get regulatory approval for a bank deal under the Biden administration jumped to a median of 265 days, according to data from Keefe, Bruyette & Woods that was presented during Bank Director’s 2025 Acquire or Be Acquired Conference in Phoenix last month. That’s roughly 42% higher than the median 187 days during Trump’s first term.

Early into Trump’s second term, there are signs that regulators could approve transactions in a faster timeframe.

“The tone at the top will certainly change,” says Jonathan Hightower, a partner at Fenimore Kay Harrison. “When you change the perspective from, ‘M&A is very risky, and it is risky to the communities the banks serve’ to the idea that, ‘M&A is a natural and healthy part of the industry,’ you will see fewer merger files getting pulled over concerns. It will speed things up.”

On Jan. 20, Trump named Travis Hill as acting chairman of the Federal Deposit Insurance Corp. Just one day after his appointment, Hill announced his goal to improve the approval process for bank deals “to ensure that merger transactions that satisfy the Bank Merger Act are approved in a timely way.” The emphasis on timely was included in his original statement.

This would include replacing a statement of policy finalized by the FDIC in September that updated a number of factors used in reviewing a transaction, including how the agency would consider the potential competitive effects of a deal, particularly in rural markets.

Although the entire 2024 statement of policy was “fairly bothersome” to the industry, the item that had the “biggest chilling effect” was likely the change that required applicants to show that the convenience and needs of the communities being served would be better after a deal closes, Hightower says.

“While convenience and needs has always been a factor, emphasizing the need to show improvement led to concerns that the FDIC could substitute its judgment for the applicant’s as it relates to how the combined bank plans to serve its customers,” Hightower adds.

During comments Hill made on Jan. 26 at the Acquire or Be Acquired Conference, he argued that the government had tried to constrain consolidation through policy rather than addressing the root causes that were forcing some banks to consider selling.

It’s widely expected that Trump’s appointees to the other banking agencies — the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau — would take a similar view of regulation as Hill.

“It all starts at the top of the house, which was this attitude of, ‘I want all deals to be subjected to incredible scrutiny,’” says Bill Burgess, cohead of financial services investment banking at Piper Sandler & Co. “Now the attitude is, ‘We’re trying to grow. We are trying to build the economy.’”

Burgess notes that the regulatory environment was particularly difficult for larger bank deals. For instance, the combination of New York Community Bancorp and Flagstar Bancorp took 584 days to close; Columbia Banking System’s merger with Umpqua Holdings Corp. dragged on for 504 days, according to KBW.

Long approval times can make it harder for the acquiring institution to retain customers and talent.

“I’m not saying to rubber stamp all deals,” Burgess says. “But there’s a level of apathy about the impact of delays to the customer base, to the employee base, to the two franchises.”

Brian Schneider, CEO and chairman of Blue Sky Bank in Pawhuska, Oklahoma, says his institution is thinking about getting back into making acquisitions. Over a five-year period ending in 2022, the $1.2 billion subsidiary of N.B.C. Bancshares in Pawhuska made three whole bank acquisitions and one branch purchase, Schneider says. After a two-year pause, he appears optimistic about future M&A activity.

“The combination of assimilating the acquisitions and the growing burden of dealing with regulatory approval put us on the sidelines for a couple of years as we focused on organic growth,” Schneider adds. “We will have our safety and soundness exam early summer, and it is our intent to discuss the regulatory climate surrounding historic high growth through acquisition and solicit feedback on the current environment.”