As we were all expecting, the OCC in 2025 is making some bold changes. Reading through the speeches given so far this year, there are 4 key priorities that we think banks should be paying attention to:
We are sharing our thoughts on each of these priorities (you can read about Bank-Fintech Partnerships, Digital Assets and Financial Inclusion here), and today we are talking about bank M&A.
It was recently announced that the OCC has “…issued an interim final rule restoring streamlined application and expedited review procedures, ensuring that well-managed and well-capitalized institutions can merge responsibly—supporting scale, innovation, and economic vitality," (source).
In short, the merger approval process just got faster, and bank consolidation is about to accelerate.
There are many reasons why banks might want to acquire, or be acquired. With the increasingly online world of banking, here are some opportunities we see:
Instead of building digital capabilities in-house, banks can acquire institutions with proven technology platforms, fintech partnerships, or specialized digital expertise. As we have previously talked about, using the right infrastructure and building specialized teams for bank-fintech partnerships and digital asset offerings is important, and now might be the time to buy into those opportunities.
Expansion is expensive and risky. Acquiring local banks in attractive markets brings with it knowledge and customer relationships that often justify acquisition premiums.
The original reason for any company merger can’t be ignored in banking. Smaller banks can combine to achieve operational efficiencies and technology investments that neither could afford independently.
Are you a natural acquirer with strong capital and management capabilities? Or are you a potential target that should consider strategic alternatives? This is a conversation that every bank Board should be having in 2025, and there is no shame in being on either side of the table.
Banks that want to be acquirers need due diligence capabilities, integration planning expertise, and management bandwidth dedicated to M&A execution. This isn't something you build during a transaction, it is something that you need to have, and ideally have proven, before making a move.
Faster regulatory approval doesn't eliminate the need for thorough due diligence. Integration risks, credit quality assessments, and cultural fit analysis still matter enormously for transaction success.
Streamlined procedures don't mean automatic approval. Banks still need clean regulatory records, strong capital positions, and strategically defensible transaction rationales.
With shorter approval timelines, integration planning must happen earlier in the process. You’ll have less time between announcement and closing and so will need integration capabilities that can execute quickly once approvals are received. Remember that post-merger integration capabilities often determine transaction success or failure.
The OCC has removed the regulatory friction that had slowed bank consolidation. Banks with strong balance sheets and management capabilities can pursue strategic acquisitions with confidence in reasonable approval timelines. Banks without strategic options may find themselves targets in transactions they don't control.
The merger market doesn't wait for banks to decide their strategic positions. It forces decisions through competitive pressure and market conditions. Make this a conversation at your Board so you know which side of the table you fall on and can prepare accordingly.
Get in touch with us if you want to automate the testing of an acquisition target.
The OCC’s Priorities in 2025: Bank-Fintech PartnershipsAs we were all expecting, the OCC in 2025 is making some bold changes. Reading through the speeches given so far this year, there are 4 key priorities that we think banks should be paying attention to:
We are sharing our thoughts on each of these priorities (you can read about Bank-Fintech Partnerships, Digital Assets and Financial Inclusion here), and today we are talking about bank M&A.
It was recently announced that the OCC has “…issued an interim final rule restoring streamlined application and expedited review procedures, ensuring that well-managed and well-capitalized institutions can merge responsibly—supporting scale, innovation, and economic vitality," (source).
In short, the merger approval process just got faster, and bank consolidation is about to accelerate.
There are many reasons why banks might want to acquire, or be acquired. With the increasingly online world of banking, here are some opportunities we see:
Instead of building digital capabilities in-house, banks can acquire institutions with proven technology platforms, fintech partnerships, or specialized digital expertise. As we have previously talked about, using the right infrastructure and building specialized teams for bank-fintech partnerships and digital asset offerings is important, and now might be the time to buy into those opportunities.
Expansion is expensive and risky. Acquiring local banks in attractive markets brings with it knowledge and customer relationships that often justify acquisition premiums.
The original reason for any company merger can’t be ignored in banking. Smaller banks can combine to achieve operational efficiencies and technology investments that neither could afford independently.
Are you a natural acquirer with strong capital and management capabilities? Or are you a potential target that should consider strategic alternatives? This is a conversation that every bank Board should be having in 2025, and there is no shame in being on either side of the table.
Banks that want to be acquirers need due diligence capabilities, integration planning expertise, and management bandwidth dedicated to M&A execution. This isn't something you build during a transaction, it is something that you need to have, and ideally have proven, before making a move.
Faster regulatory approval doesn't eliminate the need for thorough due diligence. Integration risks, credit quality assessments, and cultural fit analysis still matter enormously for transaction success.
Streamlined procedures don't mean automatic approval. Banks still need clean regulatory records, strong capital positions, and strategically defensible transaction rationales.
With shorter approval timelines, integration planning must happen earlier in the process. You’ll have less time between announcement and closing and so will need integration capabilities that can execute quickly once approvals are received. Remember that post-merger integration capabilities often determine transaction success or failure.
The OCC has removed the regulatory friction that had slowed bank consolidation. Banks with strong balance sheets and management capabilities can pursue strategic acquisitions with confidence in reasonable approval timelines. Banks without strategic options may find themselves targets in transactions they don't control.
The merger market doesn't wait for banks to decide their strategic positions. It forces decisions through competitive pressure and market conditions. Make this a conversation at your Board so you know which side of the table you fall on and can prepare accordingly.
Get in touch with us if you want to automate the testing of an acquisition target.
